If Liquidation of a Partnership Results in a Negative Balance

question 35

True/False

If liquidation of a partnership results in a negative balance in a partner's account,the partner must pay into the partnership the amount of the negative balance.

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Definitions:

Conservatism

An accounting principle that advises to exercise caution and report expenses and liabilities as soon as possible, but to delay the recognition of revenues and assets.

Gross Profit Method

An inventory estimation technique that determines the cost of goods sold and ending inventory using the gross profit margin.

Gross Profit Method

A technique used for estimating inventory and cost of goods sold, calculated by applying a gross profit percentage to sales.