In the Liquidation of a Partnership, Any Gain or Loss

question 149

Multiple Choice

In the liquidation of a partnership, any gain or loss on the realization of noncash assets should be allocated

• A) first to creditors and the remainder to partners.
• B) to the partners on the basis of their capital balances.
• C) to the partners on the basis of their income-sharing ratio.
• D) only after all creditors have been paid.

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Definitions:

Price Level

An index that measures the average of prices for goods and services in an economy over a period of time.

Aggregate Expenditure Line

A graphical representation of the total planned spending in an economy at various levels of national income.

Price Level

A measure that reflects the average prices of goods and services in an economy at a specific point in time.

Marginal Propensity

The tendency of an individual or household to spend an additional dollar of income on consuming goods and services.