Which of the Following Does NOT Have to Occur for a Partnership

question 7

Multiple Choice

Which of the following does NOT have to occur for a partnership allocation to have "substantial economic effect?"

• A) An adjustment must be made in the partner's capital account.
• B) Liquidation proceeds must be distributed in accordance with capital accounts.
• C) Profits and losses must be allocated to different partners in proportion to their equity contribution.
• D) Following the distribution of sale proceeds,partners must be liable to the partnership to restore any deficit in their capital account.

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Definitions:

Hemisphere

Each of the two halves of the brain, the right hemisphere and the left hemisphere, responsible for different functions and processes.

Nerve Fibers

Long, slender projections of nerve cells that transmit electrical impulses throughout the nervous system.

Eardrum

A thin membrane in the ear that vibrates in response to sound waves, thereby transmitting sound to the inner ear.

Sound Waves

Sounds that move through air or a different substance and become audible when they arrive at a person's or animal's eardrum.