In partnership liquidation, which of the following statements is correct? * O Only cash can be distributed to the partners upon liquidation of the partnership O Any gains or losses on the sale of non-cash assetsmust be divided equally among partners O Cash should be distributed to partners on the basis of the partner's profit or loss ratio O The general partners shall absorb the capital deficiency that cannot be made good by an insolvent partner

In partnership liquidation, which of the following statements is correct? * O Only cash can be distributed to the partners upon liquidation of the partnership O Any gains or losses on the sale of non-cash assetsmust be divided equally among partners O Cash should be distributed to partners on the basis of the partner's profit or loss ratio O The general partners shall absorb the capital deficiency that cannot be made good by an insolvent partner

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 15MC: When a partnership dissolves, the first step in the dissolution process is to ________. A. allocate...

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When a partnership dissolves, the last step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
When a partnership dissolves, the first step in the dissolution process is to ________. A. allocate the gain or loss on sale based on income sharing ratio B. pay off liabilities C. sell noncash assets D. divide the remaining cash among the partners
When a partnership is liquidated, any gains or losses realized by the sale of noncash assets are allocated to the partners based on their income sharing ratio. Why?
Which of the following is a disadvantage of the partnership form of organization? A. limited life B. no taxation at the partnership level C. flexibility in business operations D. combining of financial resources
When a partnership liquidates, do partners get paid first or do creditors get paid first?
How does a newly formed partnership handle the contribution of previously depreciated assets? A. continues the depreciation life as if the owner had not changed B. starts over, using the contributed value as the new cost basis C. shortens the useful life of the asset per the partnership agreement D. does not depreciate the contributed asset