The Liquidation of a Partnership Is a Process Containing the Following

question 42

Multiple Choice

The liquidation of a partnership is a process containing the following steps:
1) Pay partnership liabilities in cash.
2) Allocate the gain or loss on realization to the partners on their income ratios.
3) Sell noncash assets for cash and recognize a gain or loss on realization.
4) Distribute remaining cash to partners on the basis of their remaining capital balances.
Identify the proper sequencing of the steps in the liquidation process.

• A) 3 2 4 1.
• B) 3 2 1 4.
• C) 1 3 2 4.
• D) 1 4 3 2.

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