The Liquidation of a Partnership

question 10

Multiple Choice

The liquidation of a partnership

• A) cannot be a voluntary act of the partners.
• B) terminates the business.
• C) eliminates those partners with a capital deficiency.
• D) cannot occur unless all partners approve.

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Definitions:

Balance Sheet

A statement, as of a particular date, that shows the amount of assets owned by a business as well as the amount of claims (liabilities and owner’s equity) against these assets. Also known as statement of financial position.

Cost Of Goods Manufactured

The total production cost of goods that were completed during a specific period, including materials, labor, and overhead.

Raw Materials Inventory

Refers to the total cost of all the materials that are used in the production of goods but have not yet been transformed into finished products.

Work-In-Process Inventory

Inventory that includes goods partially completed but not yet ready for sale; found between raw materials and finished goods stages.