Bill, Carl, and Dwayne are in a partnership. Dwayne decides to withdraw from the partnership by selling his interest to Ethel. Bill and Carl agree to this. Bill's Capital account and Carl's Capital account
A) will not be affected when Ethel is admitted
B) will decrease when Ethel is admitted
C) will increase when Ethel is admitted
D) cannot be determined from the information given

Question

Quizplus · Accepted Answer

When Dwayne sells his interest to Ethel, only Dwayne's capital account is affected. Bill's and Carl's capital accounts remain unchanged as the transaction is between Dwayne and Ethel.

Bill, Carl, and Dwayne Are in a Partnership