Which of the Following Is True of a Liquidation of a Partnership

question 98

Multiple Choice

Which of the following is true of a liquidation of a partnership?

• A)It allocates the gain or loss on sale of assets to the partners' capital accounts based on the profit-and-loss-sharing ratio.
• B)The remaining cash after paying all liabilities are paid to the partners based on their profit-and-loss-sharing agreement.
• C)Before a business is liquidated,its books should not be adjusted or closed.
• D)It involves the selling of short-term liquid assets and does not involve the sale of fixed assets.

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Definitions:

Founding Team

A group of people with complementary skills and a shared sense of commitment coming together in founding an enterprise to build and grow it.

Economic Returns

The financial gain or loss generated as a result of an investment or business activity, taking into account both revenue and costs.

Social Returns

The non-financial gains achieved by society from an investment, project, or initiative, such as improvements in well-being or equality.

Entrepreneurs

People who manage and run enterprises, assuming higher-than-average financial risks in the process.