Which of the following statements MOST accurately describes the withdrawal of a partner at book value?
A)Withdrawing partner takes a portion of the non-current assets valued at their net book value.
B)Withdrawing partner takes a payment equal to his or her capital balance.
C)Withdrawing partner takes his or her proportionate share of partnership assets.
D)Withdrawing partner takes a payment equal to his or her proportion of the partnership cash balance.

Question

Quizplus · Accepted Answer

When a partner withdraws at book value, they receive a payment equal to their capital balance. Book value is the value of the partnership's assets, less any liabilities, according to the partnership's books. Therefore, the withdrawal is based on the withdrawing partner's capital balance, not their proportionate share of partnership assets or cash balance. The partner does not take a portion of non-current assets either, as these assets may have unrealized gains or losses that have not been reflected on the books.

Which of the Following Statements MOST Accurately Describes the Withdrawal