The Distribution of Cash, as the Final Process in Winding

question 103

True/False

The distribution of cash, as the final process in winding up the affairs of a partnership, is based on the income-sharing ratio.

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Definitions:

Investment

Commitment of current resources in the expectation of deriving greater resources in the future.

Effective Annual Rate

The interest rate on an investment or loan which accounts for the effect of compounding over a given period.

Semi-annually Return

The rate of return on an investment calculated by compounding interest twice a year.

Investment

The action or process of allocating resources, usually money, with the expectation of generating an income or profit.