In Partnership Liquidation,how Are Partner Salary Allocations Treated

question 35

Multiple Choice

In partnership liquidation,how are partner salary allocations treated?

• A)Salary allocations take precedence over creditor payments.
• B)Salary allocations take precedence over amounts due to partners with respect to their capital interests,but not profits.
• C)Salary allocations take precedence over amounts due to partners with respect to their capital profits,but not capital interests.
• D)Salary allocations are disregarded.

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Definitions:

Quick Ratio

The quick ratio, or acid-test ratio, measures a company's ability to meet its short-term obligations with its most liquid assets.

Current Ratio

A financial metric used to evaluate a company's ability to pay short-term obligations, calculated by dividing current assets by current liabilities.

Fixed Asset Turnover

A financial ratio that measures how efficiently a company is using its fixed assets to generate sales.

Profit Margin

A financial metric used to evaluate a company's profitability, calculated as net income divided by revenue.