During the Dissolution of a Partnership That Will Be Continued

question 63

Multiple Choice

During the dissolution of a partnership that will be continued by the remaining partners, if a noncontinuing partner holds 20% of the partnership in which the assets are valued at $10,000 how much will the partner receive assuming the noncontinuing partner has taken no wrongful action against the partnership?

• A) $2,000
• B) $2,000 minus any losses the noncontinuing partner's leaving caused the partnership to sustain.
• C) $2,000 minus the noncontinuing partner's share of loses, if any, in the first year after dissolution.
• D) $2,000 minus the noncontinuing partner's share of expenses involved with dissolution.
• E) Nothing

---

Definitions:

Absorption Costing

A method of accounting that encompasses all costs associated with manufacturing, such as direct materials, direct labor, and variable as well as fixed manufacturing overhead, in the pricing of a product.

Unit Product Cost

The total cost to produce a single unit of product, including direct materials, direct labor, and allocated overhead, crucial for pricing and profitability analysis.

Variable Costing

A costing method that includes only variable costs (costs that change with production volume) in product costs and treats fixed costs as period costs.

Unit Product Cost

The total cost assigned to a single unit of product, encompassing direct materials, direct labor, and manufacturing overhead.