Question

A partner withdraws from a partnership by selling her interest to another person who currently is not associated with the firm. As a result of this transaction, the capital account balance of the other partners in the partnership a.will increase. b.will decrease. c.will remain the same. d.may increase, decrease, or remain the same.

Answer 1

The correct answer is letter "C": will remain the same.

Step-by-step explanation:

A partnership is an organization with two or more members running a business. They share the profits in percentage terms in proportion to their partnership value. The partnership dissolves and a new partnership is created when one of the partners is removed, retired or deceased or even when a new partner is introduced. The remaining partners' capital will be the same, for accounting purposes.