When assets are contributed to a partnership they should be recorded in the books of the new entity at:
A) historic cost.
B) book value.
C) carrying value.
D) fair value.

Question

Quizplus · Accepted Answer

Assets contributed to a partnership should be recorded at their fair value. This is because fair value represents the most accurate representation of the asset's worth at the time of contribution. Using historic cost, book value, or carrying value may not accurately reflect the current market value of the asset.

When Assets Are Contributed to a Partnership They Should Be