ADVANCED ACCOUNTING >CUSTOM<
14th Edition
ISBN: 9781265537012
Author: Hoyle
Publisher: MCG CUSTOM
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Chapter 15, Problem 2P
To determine
Identify the statement which is true concerning the accounting for a
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Which one of the following statements is incorrect related to the liquidation of the company?
1. Liquidation shall be effected by all the partners
2. Liquidation is processed by an appointed liquidator
3. Two or more liquidators cannot be appointed to act jointly
4. Liquidator appointment need not be as per constitutive documents.
Claims against partners personal assets by creditors if the partnership can't pay its debts refers to?
a liquidation differs from a dissolution in that in a liquidation?
In a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit.
Group of answer choices
True
False
Chapter 15 Solutions
ADVANCED ACCOUNTING >CUSTOM<
Ch. 15 - Prob. 1QCh. 15 - Prob. 2QCh. 15 - Prob. 3QCh. 15 - Prob. 4QCh. 15 - What is the purpose of a statement of liquidation?...Ch. 15 - Prob. 1PCh. 15 - Prob. 2PCh. 15 - Prob. 3PCh. 15 - Prob. 4PCh. 15 - A partnership is considering possible liquidation...
Ch. 15 - What is a predistribution plan? a. A list of the...Ch. 15 - Prob. 7PCh. 15 - Prob. 8PCh. 15 - Prob. 9PCh. 15 - Prob. 10PCh. 15 - Prob. 11PCh. 15 - Prob. 12PCh. 15 - Prob. 13PCh. 15 - Prob. 14PCh. 15 - Prob. 15PCh. 15 - Prob. 16PCh. 15 - Prob. 17PCh. 15 - Prob. 18PCh. 15 - Prob. 25PCh. 15 - Prob. 26PCh. 15 - March, April, and May have been in partnership for...Ch. 15 - Prob. 28PCh. 15 - Prob. 29P
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- If the share of losses on realization of the sale of noncash assets exceed the balance in a partner's capital account, the resulting balance is called a deficiency. Group of answer choices True Falsearrow_forwardIn the liquidation of a partnership, the gains and losses from assets sold are O divided equally among the partners. divided among the partners in the stated income ratio. divided among the partners in proportion to their capital equity interests. O ignored.arrow_forwardWhy are liquidation gains and losses usually recorded as direct adjustments to the partners’ capital accounts?arrow_forward
- State the method to determine the amounts to be paid to partners in a liquidation.arrow_forwardAnswer if TRUE or FALSE. If the statement is FALSE provide at least a brief explanation why it's wrong. 1. Liquidation expenses which are incurred in the realization of non-cash assets affect cash but not partners' capital. 2. A partnership is generally liquidated when its term is terminated. 3. The outside creditors of the partnership have better claims over the personal assets of the partner. 4. Gains and losses arising from the sale of the assets in a partnership liquidation are always divided equally among partners.arrow_forwardWhat is the meaning of the statement below? Please explain. In the partnership agreement, interest will not accrue on partnes' loan balances during the liquidation process.arrow_forward
- Accounting type Question: As per the decision in the Garner vs Murray case, when the partner's capital accounts are fixed, any loss arising due to the capital deficiency in the insolvent partner's capital account is to be borne by solvent partners in the ratio of ..... A. profit sharing ratio B. last agreed capital ratio C. sacrificing ratio D. gaining ratioarrow_forwardA partner's withdrawal of assets from a LLP that is considered a permanent reduction in that partner's equity is debited to the partner's: Select one :- a. Retained Earnings account b. Loan Receivable account c. Drawing account d. Capital accountarrow_forwardIn the liquidation of a partnership, why might a partner be concerned that a fellow partner has a deficit net capital balance, and how might such a deficit be eliminated?arrow_forward
- If there is a provision for division of profits but not losses in the partnership agreement, it is concluded that: O Losses should not be divided to the capital accounts, but matched against future earnings Losses should be divided equally O Losses should be divided using the same approach as division of profits O Losses should be allocated according to the ratio of capital account balancesarrow_forwardIn the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. True /falsearrow_forwardIn a partnership liquidation, a gain from the sale of assets is allocated to the: a. Payment of partnership liabilities b. Partner with the lowest capital balances first c. Partners based on their capital balances d. Partners based on their profit and loss ratioarrow_forward
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