McCartney, Harris, and Hussin Are Dissolving Their Partnership

question 115

Multiple Choice

McCartney, Harris, and Hussin are dissolving their partnership. Their partnership agreement allocates income and losses equally among the partners. The current period's ending capital account balances are McCartney, $15,000, Harris, $15,000, Hussin, $(2,000) . After all the assets are sold and liabilities are paid, but before any contributions to cover any deficiencies, there is $28,000 in cash to be distributed. Hussin pays $2,000 to cover the deficiency in his account. The general journal entry to record the final distribution would be:

Understand the scope and limitations of the FASB’s conceptual framework project.

Identify the number and purpose of Statements of Financial Accounting Concepts issued.

Recognize the general and specific objectives of financial reporting according to the FASB.

Comprehend the role of accrual accounting in financial reporting.

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Definitions:

Federal Funds

Reserve balances that commercial banks hold at the Federal Reserve, which can be lent to other banks overnight to meet reserve requirements, influencing the federal funds rate.

Short-Term Basis

A period or timeframe that typically covers the near future, often less than a year, used for planning and decision making.

Banks

Financial institutions that accept deposits from the public, create credit, and provide loans, among other financial services.

Lender Of Last Resort

The role typically assumed by a central bank to provide funds to financial institutions in distress, to prevent systemic failures.