From which of the following sources can partnerships increase their capital?
From which of the following sources can partnerships increase their capital?
- A) admission of a new partner
- B) sales of shares
- C) discharge of a mortgage
- D) grants from relatives
Correct Answer: A) admission of a new partner
Explanation
The question is asking where partnerships can get more money (increase their capital) from. There are four options given and we need to choose the correct one.Option A is the correct answer: admission of a new partner. This means that if a partnership allows a new member to join, that new partner would bring in more money and increase the capital of the partnership.
Option B, sales of shares, might be a good way for a company to increase its capital, but it doesn't apply to partnerships. Partnerships don't have shares like companies do.
Option C, discharge of a mortgage, doesn't increase a partnership's capital either. Discharging a mortgage means that the partnership has paid off a debt, but it doesn't give them any extra money.
Option D, grants from relatives, is also not a good answer. Grants are like gifts, and it's not reliable to depend on gifts from relatives to increase the capital of a partnership.
In summary, the correct answer to the question is Option A: admission of a new partner. This means that if a partnership allows a new member to join, that new partner would bring in more money and increase the capital of the partnership.