Which Statement Is Correct in Describing the Rank Order of Payments

question 30

Multiple Choice

Which statement is correct in describing the rank order of payments as specified by the Uniform Partnership Act?

• A)Payments to partners are ranked equally,regardless of underlying basis.
• B)Payment to partners with excess capital balances may be placed ahead of payments to creditors.
• C)Payments to creditors other than partners are ranked ahead of payments to partners.
• D)After payments are made to other creditors and partners with loans to the partnership,payment up to the same amount can be made to partners with capital interests.

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Definitions:

Employee Turnover

The rate at which employees leave a company and are replaced by new employees over a particular period.

Compensation Expense

Costs incurred by an employer to pay employees, including wages, benefits, and bonuses.

Stock Appreciation Rights

A type of employee incentive that grants the right to receive a bonus equal to the appreciation in the company's stock over a set period.

Compensation Expense

An accounting expense recognized in the books, representing the cost of the benefits provided to employees, including wages, salaries, and bonuses.