Which of the Following Procedures Is Acceptable When Accounting for a Deficit

question 21

Multiple Choice

Which of the following procedures is acceptable when accounting for a deficit balance in a partner's capital account during partnership liquidation,if the partner with a negative capital balance is personally insolvent?

• A)The partner with a negative capital balance must contribute personal assets to the partnership that are sufficient to bring the capital account to zero.
• B)The negative capital balance may be absorbed by those partners having a positive capital balance according to the residual profit and loss sharing ratios that apply to all the partners.
• C)The negative capital balance may be absorbed by those partners having a positive capital balance according to the residual profit and loss sharing ratios that apply to those partners having positive balances.
• D)The partner with a negative capital balance must contribute personal assets to the partnership that are sufficient to bring the capital account to the same level of the other partners' capital accounts.

---

Definitions:

Neurons

Specialized nerve cells that convey information via electrical and chemical signals in the nervous system.

Myelination

The process by which axons of nerve cells are coated with myelin, a fatty substance that speeds up the transmission of nerve impulses.

Demyelination

A pathological condition in which the myelin sheath covering nerve fibers is damaged, impairing the conduction of electrical signals in the nervous system.

Motor Pathways

Neural pathways that transmit impulses from the brain to control movements in the body.