A Gain Will Only Arise on a Distribution from a Partnership

question 1

True/False

A gain will only arise on a distribution from a partnership of cash that exceeds the partner's basis in the partnership interest. For this purpose, only cash, checks, and credit card charges are treated as cash.

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Definitions:

Equity Ratio

A financial ratio indicating the relative proportion of shareholders' equity used to finance a company's assets.

Total Asset Turnover

A financial metric that measures a company's efficiency in using its assets to generate revenue.

Stretching Payables

Extending the period to pay bills as long as possible without incurring penalties, to improve short-term liquidity.

Current Liabilities

Current liabilities are a company's debts or obligations that are due to be paid to creditors within one year.