In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. Question 27 options: True False

In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. Question 27 options: True False

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

In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio.

Question 27 options:

	True
	False

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In the liquidating process, any uncollectible deficiency becomes a loss to the partnership and is divided among the remaining partners' capital balances based on their income-sharing ratio. True /false
In a partnership, a capital deficiency occurs for a partner when Options: • His share in the losses of the partnership is more than his capital balance • Loan payable by the partnership to him greater than his capital balance • His solvency is lesser than his capital balance • His personal assets are less than his personal liabilities
Which of the following is true regarding capital deficiencies? O a Ob Oc Od The partners do not have a legally enforceable claim against the partner with the capital deficiency. If a partner with a capital deficiency is unable to pay the amount owed to the partnership, the partners with debit balances must absorb the loss. The loss is allocated based on the profit and loss ratios between the partners whether with credit or debit balances. if the partner with the capital deficiency pays the amount owed to the partnership, the deficiency is eliminated.
12 The undistributed Profit in the partnership firm is shown in _____________ of the old Balance Sheet. a. Asset Side Only b. Liabilities Side Only c. None of the options d. Asset Side and Liabilities Side
NOTE AI ANSWER EXPERT SOLUTION
Identify the correct statement/s from the following:I. In absence of partnership agreement, no interest on capital is allowed II. In absence of partnership agreement, 6% interest on partner's loan is allowed O a. Statement II only correct O b. Statement I only correct O c. Both Statements are correct O d. Both Statements are wrong
question 15 choose the correct answer from the choices
PARTNERSHIP DISSOLUTION True or False _______1. Insolvency, insanity, or incapability to perform by a partner may cause the dissolution of the firm. _______2. Dissolution and liquidation mean the same thing. _______3. Asset revaluation may be recognized for the current partners when the new equity is greater than the original partners' equity. _______4. Dissolution may not necessarily change the basic function or operation of the partnership. _______5. Dissolution always immediately causes the termination of a firm. _______6. An admission of a new partner causes a change in the ownership interest of the original partners. _______7. Ownership may be transferred at will by anyone partner without consulting the other partners. _______8. Bonus is, in effect, transfer of capital from one partner to another partner. _______9. Recognizing undistributed profit or loss share of the partners at dissolution date is necessary in effecting dissolution. _______10. ABC Partnership decided to admit D…
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27 Statement I: When a partner sells an interest to a new partner at an amount that exceeds the carrying amount of the equity sold, the difference is recognized as a personal gain of the selling partner from the transaction. Statement II: The amount of net assets invested of a new partner into an existing partnership is not always equal to the amount credited to his capital account. O True, true Faise, false Fase, true O True false
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