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:

Operating Activities Section

Part of a cash flow statement that shows the cash generated or used in the primary revenue-producing activities of the business.

Land for Cash

Land for cash refers to the transaction in which real property is sold for cash payment without any financing involved.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows over a given period.

Financing Section

This term refers to the part of a financial report or business plan that outlines how a company funds its operations, including debt, equity, and other financing sources.