In a partnership liquidation, the final cash distribution to partners is made in accordance with the

Chapter 16Partnership LiquidationMultiple Choice1. Which of the following statements is correct?1. Personal creditors have first claim on partnership assets.2. Partnership creditor

In a partnership liquidation, the final cash distribution to partners is made in accordance with the

Chapter 16Partnership LiquidationMultiple Choice1. Which of the following statements is correct?1. Personal creditors have first claim on partnership assets.2. Partnership creditors have first claim on partnership assets.3. Partnership creditors have first claim on personal assets.a. 1b. 2c. 3d. Both 2 and 32. The first step in the liquidation process is toa. convert noncash assets into cash.b. pay partnership creditorsc. compute any net income (loss) up to the date of dissolution.d. allocate any gains or losses to the partners.3. A schedule prepared each time cash is to be distributed is called a(n)a. advance cash distribution schedule.b. marshaling of assets schedule.c. loss absorption potential schedule.d. safe payment schedule.4. An advance cash distribution plan is prepareda. each time cash is distributed to partners in an installment liquidation.b. each time a partnership asset is sold in an installment liquidation.c. to determine the order and amount of cash each partner will receive as it becomes available fordistribution.d. none of these.5. The first step in preparing an advance cash distribution plan is toa. determine the order in which partners are to participate in cash distributions.b. compute the amount of cash each partner is to receive as it becomes available for distribution.c. allocate any gains (losses) to the partners in their profit-sharing ratio.d. determine the net capital interest of each partner.6. Offsetting a partner's loan balance against his debit capital balance is referred to as thea. marshaling of assets.b. right of offset.c. allocation of assets.d. liquidation of assets.7. If a partner with a debit capital balance during liquidation is personally solvent, thea. partner must invest additional assets in the partnership.b. partner's debit balance will be allocated to the other partners.c. other partners will give the partner enough cash to absorb the debit balance.d. partnership will loan the partner enough cash to absorb the debit balance.http://downloadslide.blogspot.com

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