An Entry Is Not Required in the Liquidation of a Partnership

question 200

Multiple Choice

An entry is not required in the liquidation of a partnership to record the

• A) payment of cash to creditors.
• B) distribution of cash to the partners.
• C) sale of noncash assets.
• D) allocation of a capital deficiency to partners with credit balances when the deficient partner is expected to pay the deficiency.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or service delivery, such as raw materials and labor costs.

Fixed Costs

Costs that do not vary with the level of production or sales volume, remaining constant even as production levels change.

Break-even Point

The point at which total costs equal total revenue, resulting in no net loss or gain for the business.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.