When a Partnership Is Liquidated,which of the Following Is Not

question 55

Multiple Choice

When a partnership is liquidated,which of the following is not true?

• A)Noncash assets are converted to cash.
• B)Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss sharing ratio.
• C)Liabilities are paid or settled.
• D)Any remaining cash is distributed to the partners based on their capital balances.
• E)Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio.

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Definitions:

Variable Manufacturing Cost

Costs that fluctuate with the level of production output, such as raw materials and direct labor.

Fixed Manufacturing Cost

Overheads that do not change with the level of manufacturing output, including salaries of permanent staff and rent.

Annual Impact

The effect or influence that something has over the course of a year, often used in the context of financial, environmental, or social effects.

Net Operating Income

The total profit of a business after subtracting operating expenses but before deducting taxes and interest.