When a Partnership Is Insolvent and a Partner Has a Deficit

question 15

Multiple Choice

When a partnership is insolvent and a partner has a deficit capital account balance, that partner is legally required to:

• A) Declare personal bankruptcy.
• B) Initiate legal proceedings against the partnership.
• C) Contribute cash to the partnership.
• D) Deliver a note payable to the partnership with specific payment terms.
• E) None of these answer choices are correct. The partner has no legal responsibility to cover the capital deficit balance.

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