s Claims against partners' personal assets by creditors if the partnership can't pay itsdebts refers toa. liquidation.b. dissolution.c. mutual agency.d. unlimited liability.6 A liquidation differs from a dissolution in that in a liquidationa. assets may be revalued.b. the business will not continue.c. there may be an adjustment of partners' capital accounts.d. gains and losses are distributed according to the partnership agreement.7. A partner's loss absorption balance is calculated bya. dividing the partner's capital balance by his percentage interest in capital.b. multiplying distributable assets by the partner's profit sharing percentage.C. dividing the partner's total interests by his profit and loss sharing percentage.d. multiplying the partner's total interests by his profit and loss sharingpercentage.8. In accounting for liquidation of a partnership, cash payments to partners after alloutside creditors' claims have been satisfied, but before final cash distribution,should be according torelative profit and loss sharing ratios.b. safe payments computations.the final balances in partners' capital accounts.d. the relative share of gain or loss on liquidation.a.С.9. Which of the following is not correct with respect to an installment liquidation of apartnership?a. All remaining liquidation expenses are anticipated.b. All non-cash assets are assumed to be worthless.C. Distributions to partners are always made according to their profit sharingpercentages.d. Partners with the greatest ability to absorb losses and expenses are the first toreceive installment distributions.

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. Claims against partners' personal assets by creditors if the partnership can't pay its debts refers to a. liquidation. b. dissolution. C. mutual agency. d. unlimited liability.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

s Claims against partners' personal assets by creditors if the partnership can't pay its
debts refers to
a. liquidation.
b. dissolution.
c. mutual agency.
d. unlimited liability.
6 A liquidation differs from a dissolution in that in a liquidation
a. assets may be revalued.
b. the business will not continue.
c. there may be an adjustment of partners' capital accounts.
d. gains and losses are distributed according to the partnership agreement.
7. A partner's loss absorption balance is calculated by
a. dividing the partner's capital balance by his percentage interest in capital.
b. multiplying distributable assets by the partner's profit sharing percentage.
C. dividing the partner's total interests by his profit and loss sharing percentage.
d. multiplying the partner's total interests by his profit and loss sharing
percentage.
8. In accounting for liquidation of a partnership, cash payments to partners after all
outside creditors' claims have been satisfied, but before final cash distribution,
should be according to
relative profit and loss sharing ratios.
b. safe payments computations.
the final balances in partners' capital accounts.
d. the relative share of gain or loss on liquidation.
a.
С.
9. Which of the following is not correct with respect to an installment liquidation of a
partnership?
a. All remaining liquidation expenses are anticipated.
b. All non-cash assets are assumed to be worthless.
C. Distributions to partners are always made according to their profit sharing
percentages.
d. Partners with the greatest ability to absorb losses and expenses are the first to
receive installment distributions.

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