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:

Units-of-Activity

A depreciation method that allocates expense based on the actual usage or production levels of an asset.

Double-Declining-Balance Method

A depreciation technique that accelerates the rate at which an asset loses value, doubling the rate of the straight-line depreciation method.

Straight-Line Method

A depreciation technique that allocates an equal amount of depreciation to each year of the asset's useful life.

Depreciation

The planned distribution of the costs associated with a tangible asset over its usage period.