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2. The cash settlement of all liabilities is referred to as realization. 1 1. Liquidation is the process of selling the assets, paying the liabilities, and distributing the remaining cash or other assets to the partners. 2. Partnership creditors have priority over partnership assets. 3.

2. The cash settlement of all liabilities is referred to as realization. 1 1. Liquidation is the process of selling the assets, paying the liabilities, and distributing the remaining cash or other assets to the partners. 2. Partnership creditors have priority over partnership assets. 3.

FINANCIAL ACCOUNTING
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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TRUE OR FALSE
19. When cash is insufficient to fully satisfy the cash requirements in a 20. In partnership liquidation, the managing partner has to shoulder, in In 21. inv 22. Lic the partners. tmainaise sh 3 owing to him by the partnership. 23. If th 24. is 13. equally among partners. wid. 14. Payment to creditors shall be made in the following order of priorit 25. C a. Outside creditors. b. Inside creditors. c. Owing to the partners with respect to their capital contributors d. Owing to the partners with respect to their share in profits. 26. 15. Gains and losses on the sale of assets in liquidation are distributed among partners according to capital balances. 27. 16. A partnership is said to be dissolved when the business is terminated. 360 17. Once all liabilities are paid, the remaining cash and other assets are distributed to the partners according to their profit and loss agreement. 28. 18. Gains and losses on sale of assets in liquidation are distributed amols to partners according to profit and loss agreement. dT Pestesi ba 29. particular priority, then the available cash will be distributed using the profit and loss ratio. 30 full or in part, for the deficit of the limited partner's account.
Transcribed Image Text:19. When cash is insufficient to fully satisfy the cash requirements in a 20. In partnership liquidation, the managing partner has to shoulder, in In 21. inv 22. Lic the partners. tmainaise sh 3 owing to him by the partnership. 23. If th 24. is 13. equally among partners. wid. 14. Payment to creditors shall be made in the following order of priorit 25. C a. Outside creditors. b. Inside creditors. c. Owing to the partners with respect to their capital contributors d. Owing to the partners with respect to their share in profits. 26. 15. Gains and losses on the sale of assets in liquidation are distributed among partners according to capital balances. 27. 16. A partnership is said to be dissolved when the business is terminated. 360 17. Once all liabilities are paid, the remaining cash and other assets are distributed to the partners according to their profit and loss agreement. 28. 18. Gains and losses on sale of assets in liquidation are distributed amols to partners according to profit and loss agreement. dT Pestesi ba 29. particular priority, then the available cash will be distributed using the profit and loss ratio. 30 full or in part, for the deficit of the limited partner's account.
Write TRUE if the statement is correct or FALSE if the statement is not correct. The cash settlement of all liabilities is referred to as realization. and distributing the remaining cash or other assets to the partners. Partnership creditors have priority over partnership assets. Prog 1 1. Liquidation is the process of selling the assets, paying the liabilities, 2. 3. 4. A partnership may be dissolved without being liquidated but liquidation is always preceded by dissolution. 5. When a general partner becomes insolvent the claim against his separate properties shall be ranked in the following manner: a.) Owing to personal creditors, b.) Owing to partnership creditors, 2 otr oilsic.) Owing to partners for contributions made. Sonshd A partner's interest can be obtained by simply adding the partner's capital account, loans to and from the partnership. 6. 7. In case the partnership is insolvent an industrial partner is liable to pay the partnership creditors out of his personal properties since he is a general partner. 8. The right of offset is the legal right of a partner to apply part or all of. his loan account balance against his capital deficiency resulting from 9. partnership.
Transcribed Image Text:Write TRUE if the statement is correct or FALSE if the statement is not correct. The cash settlement of all liabilities is referred to as realization. and distributing the remaining cash or other assets to the partners. Partnership creditors have priority over partnership assets. Prog 1 1. Liquidation is the process of selling the assets, paying the liabilities, 2. 3. 4. A partnership may be dissolved without being liquidated but liquidation is always preceded by dissolution. 5. When a general partner becomes insolvent the claim against his separate properties shall be ranked in the following manner: a.) Owing to personal creditors, b.) Owing to partnership creditors, 2 otr oilsic.) Owing to partners for contributions made. Sonshd A partner's interest can be obtained by simply adding the partner's capital account, loans to and from the partnership. 6. 7. In case the partnership is insolvent an industrial partner is liable to pay the partnership creditors out of his personal properties since he is a general partner. 8. The right of offset is the legal right of a partner to apply part or all of. his loan account balance against his capital deficiency resulting from 9. partnership.
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