Admission of New Partner: Fill In the Blanks

True Tamplin

Written by True Tamplin, BSc, CEPF®
Updated on March 25, 2022

1. An intangible asset related to the reputation of a business is known as .

2. A new partner can be admitted into a partnership with the of all partners.

3. The goodwill of a business can be sold only by the business.

4. Technically, the admission of a new partner the old partnership

5. An incoming partner contributes to share in the total assets and for future profits.

6. Excess of the proportionate investment is the cost of for the old partners.

7. Market value of the business - Net worth of the business = .

8. Under the goodwill method, goodwill is shown on the .

9. Goodwill is distributed among old partners according to the income sharing ratio.

10. A new partnership deed is when an amalgamation of firms takes place.

Frequently Asked Questions

What is a Partnership in accounting terms?

A Partnership is an association of two or more persons who carry on a business for profit. Each partner has unlimited liability for the debts of the Partnership. Partnership accounting is based on the principle of mutual agency, which holds that each partner is an agent of the Partnership and is responsible for all actions taken in connection with the Partnership business.

What is the main purpose of a Partnership agreement?

The four types of Partnerships are general, limited, joint venture, and unique.

What is the main purpose of a Partnership agreement?

What is the main purpose of a Partnership agreement?

Why is a new partner admitted?

Partnership firms admit new partners to increase capital resources, secure advantages of a new entrant’s skill, and to benefit from that person’s business connections.

What are the rights of a newly admitted partner?

There are two main rights of partners. The first is the right to share in the assets of the firm if it is dissolved. The second is the right to share in future profits of the firm.

True Tamplin, BSc, CEPF®

About the Author
True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website, view his author profile on Amazon, or check out his speaker profile on the CFA Institute website.

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