Answered: After all partnership assets have been…

After all partnership assets have been converted to cash and all liabilities paid, the remaining cash should equal the sum of the balances of the partners’ capital accounts. Why?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter15: Partnership Accounting

Section: Chapter Questions

Problem 3Q: Can a partnership assume liabilities as part of one of the partners contributions?

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Question

After all partnership assets have been converted to cash and
all liabilities paid, the remaining cash should equal the sum
of the balances of the partners’ capital accounts. Why?

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