Asked by Christopher Roney on Jun 24, 2024
Verified
When a partner invests noncash assets in a partnership, the assets are recorded at the partner's book value.
Noncash Assets
Assets owned by a business that are not in the form of cash but can potentially be converted into cash, such as inventory and equipment.
Book Value
The net value of a company's assets minus its liabilities, often used to determine a company's value should it decide to liquidate.
- Identify the elements that contribute to the creation and functioning of a partnership.
Verified Answer
DK
Diarmuid KennedyJun 30, 2024
Final Answer :
False
Explanation :
Noncash assets contributed by a partner are recorded at their fair market value, not the partner's book value. This is because book value may not accurately reflect the current value of the asset.
Learning Objectives
- Identify the elements that contribute to the creation and functioning of a partnership.