Which One of the Following Statements Is Correct

question 60

Multiple Choice

Which one of the following statements is correct?

• A) If a partner of a liquidating partnership is unable to pay a capital account deficit, the deficit is absorbed by the other partners in the profit and loss ratio of those partners.
• B) Gains and losses from the sale of noncash assets are divided in the ratio of the partners' capital account balances absent an alternate income-sharing plan stated in the partnership agreement.
• C) A loan receivable from a partner is added to the partner's capital account balance in the preparation of a cash distribution plan.
• D) Partners may not receive any cash before partnership creditors receive cash when liquidating a partnership.
• E) All cash payments to partners are made using their profit and loss ratio when liquidating the partnership.

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Definitions:

Predictable Variability

The expected fluctuation in demand, supply, or operational processes that can be anticipated based on patterns or historical data.

Forecasted Demand

The estimated quantity of a product or service that consumers will purchase in the foreseeable future.

Subcontracting

The practice of assigning or outsourcing part of the contractual obligations or work to another party, often to specialize or expedite processes.

Seasonal Workforce

Employees hired on a temporary basis, often in industries that experience fluctuations in demand at different times of the year.