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:

Corporation

A form of business organization that is owned by owners, called shareholders, who have no inherent right to manage the business, and is managed by a board of directors that is elected by the shareholders.

Takings Clause

Part of the Fifth Amendment of the U.S. Constitution, stating that private property cannot be taken for public use without just compensation.

Eminent Domain

A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.

Private Property

Land or possessions owned by individuals or corporations, not by the government or public as a whole.