When a Partner Is Unable to Pay a Capital Deficiency

question 45

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 before distribution of cash.
• C) The partnership ends before distribution of cash.
• D) The deficient partner is relieved of the liability.
• E) The remaining partners must wait for the deficiency to be paid before cash is distributed.

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Definitions:

Superposition

A principle stating that in an undisturbed sequence of rocks, layers of rock were deposited in order from bottom to top according to their age.

Cross-Cutting

Relates to geological features that intersect or cut across other geological formations, indicating a relative age relationship.

Inclusions

Pieces of one rock unit that are contained within another, indicating that the included pieces are older than the host rock.

Sedimentary Rocks

Rocks formed by the accumulation and consolidation of sediment, often containing fossils of plants and animals that lived millions of years ago.