Which One of the Following Statements Is Correct

question 36

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 if there is no income-sharing plan in the partnership contract.
• 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:

Personal Responsibility

The idea that individuals are accountable for their actions and decisions, and must take ownership of the consequences that come from those actions and decisions.

Successes

Achievements of an aim or goal, generally bringing a sense of accomplishment and pride to the individual or group involved.

Failures

Instances or events when desired goals or expectations are not met, often viewed as opportunities for learning and improvement.

Overconfident

Characterized by an overly strong belief in one's abilities or outcomes, often more than is warranted by the reality.