Which of the Following Statements About the Liquidation of a Partnership

question 187

Multiple Choice

Which of the following statements about the liquidation of a partnership is TRUE?

• A) Gains and losses from the disposal of assets are always distributed to the partner's capital accounts based on their respective percentage of total capital.
• B) The final cash distribution is always based on equal shares.
• C) The final cash distribution is based on the partners' capital account balances.
• D) The final cash distribution is always based on the profit sharing formula specified in the partnership agreement.

---

Definitions:

Supreme Court

The highest judicial court in a country or state, typically having the ultimate authority in interpreting laws and the constitution.

Binding Agreement

A legally enforceable contract between two or more parties.

Settlement Agreement

A legally binding contract between parties that resolves a dispute and outlines the terms of the settlement.

Voluntarily

Acting based on one's own free will or consent without external compulsion or coercion.