Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 24 - No. 24)
What is the effect on the statement of financial position when a partner lends the partnership money?
Partner's capital increases, and cash increases.
Partnership liabilities increase, and cash increases.
Partner's capital decreases, and cash decreases.
Partnership assets decrease, and cash decreases.
Explanation
The partnership has a liability to the partner (loan payable) and it receives cash.
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