Which of the Following Is True About Asset Distribution in an LLP

question 88

Multiple Choice

Which of the following is true about asset distribution in an LLP?

• A)If the LLP has been profitable,each partner will receive the net amount in his capital account.
• B)The partners have liability for partnership obligations beyond the firms' assets.
• C)An LLP partner has to contribute an amount equal to the negative balance in his account to pay creditors.
• D)The creditors must sue the partner to force the partner to pay the debt.

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Definitions:

Bonds Payable

Bonds payable refers to the amount of money a company owes to bondholders and is recorded as a long-term liability on the company's balance sheet.

Straight-Line Method

An approach to depreciation that divides the cost of an asset evenly over its expected lifespan, resulting in the same depreciation expense annually.

Annual Interest Expense

The total cost incurred by a borrower in a year for all debts, represented as the interest payments made on any borrowed funds.

Bond Discount

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.