When a Partner Is Unable to Pay a Capital Deficiency

question 32

Multiple Choice

When a partner is unable to pay a capital deficiency:

• A)The partner must take out a loan to cover the deficient balance.
• B)The deficiency is absorbed by the remaining partners.
• C)The partnership ends.
• D)The deficient partner has no personal liability to pay the deficiency.
• E)The partnership must be liquidated.

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Definitions:

Hypothetical-deductive reasoning

A method of problem-solving or decision-making that starts with a hypothesis or a proposed explanation, then deduces logical consequences to test the hypothesis.

Logical implications

The relationship between statements where the truth of one indicates the truth of another; foundational in reasoning and argumentation.

Premises

Buildings and land owned or occupied by a person or organization.

Formal operational thinking

A stage in Jean Piaget's theory of cognitive development, starting around age 12, where individuals gain the ability to think abstractly and logically.