The Remaining Cash of a Partnership (After Creditors Have Been

question 176

Multiple Choice

The remaining cash of a partnership (after creditors have been paid) upon liquidation is divided among partners according to their

• A) capital balances
• B) contribution of assets
• C) drawing balances
• D) income sharing ratio

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Definitions:

Purchasing

The process of acquiring goods, services, or works from an external source, often via a contract.

Investing Assets

Assets acquired for the purpose of generating income from investments rather than for use in the company's main business operations.

Bonus

An additional payment given to employees as a reward for their performance, over and above their regular salary.

Existing Partner(s)

Refers to current members of a partnership who share ownership and responsibility for the business.