During Liquidation, the Proceeds from the Sale of Assets Must

question 50

Multiple Choice

During liquidation, the proceeds from the sale of assets must first be used to repay:

• A) shareholders.
• B) partners.
• C) owners.
• D) creditors.
• E) customers.

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Definitions:

Sales Price

The amount of money a buyer pays to a seller for the purchase of a good or service.

Accounts Receivable

Money owed to a company by its customers from the sale of products or services on credit.

Sales Discounts

From the seller’s perspective, discounts that a seller may offer the buyer for early payment.

Normal Debit Balance

The typical balance that an account should have, where asset and expense accounts usually have debit balances.