John, Samuel, and Jim Are General Partners in the Development

question 59

Multiple Choice

John, Samuel, and Jim are general partners in the development of an electric car.Jim pours all his money into the project, but it never seems to work out.Eventually the partnership and Jim cannot meet their daily obligations, and the partnership is dissolved.Jim files for bankruptcy.If the partnership assets are insufficient to pay all claims against the partnership:

• A) Jim's personal assets are not available for the partnership debts because he has limited liability.
• B) the bankruptcy court must follow the doctrine of marshaling of assets.
• C) the trustee in bankruptcy must seek recovery of the deficiency first from John and Samuel.
• D) Jim is released from liability because of the bankruptcy proceedings.

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Definitions:

Credit Services

Financial services that provide customers with credit facilities to purchase goods or services, including loans, credit cards, and lines of credit.

GAAP

Generally Accepted Accounting Principles, a standard framework of guidelines for financial accounting used in any jurisdiction.

IFRS

International Financial Reporting Standards, a set of accounting standards providing a global framework for how public companies prepare and disclose their financial statements.

Chart of Accounts

An organized list of all accounts used by an entity in its accounting system, facilitating the recording, reporting, and analysis of financial transactions.