If a Partner Has a Capital Deficiency and Does Not

question 83

Multiple Choice

If a partner has a capital deficiency and does not have the personal resources to eliminate it,

• A) the creditors will have to absorb the capital deficiency.
• B) the other partners will absorb the capital deficiency on the basis of their respective capital balances.
• C) the other partners will have to absorb the capital deficiency on the basis of their respective profit-sharing ratios.
• D) neither the creditors nor the other partners will have to absorb the capital deficiency.

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Definitions:

Yards

A unit of measurement equal to 3 feet or 0.9144 meters, used primarily in the United States, the United Kingdom, and Canada for measuring distances.

Centimeters

A measurement in the metric system that corresponds to one hundredth of a meter in length.

Yards

A unit of length in the Imperial and US customary systems, equal to 3 feet or 0.9144 meters.

Meters

The base unit of length in the International System of Units (SI), equivalent to 100 centimeters.