When a partnership is dissolved, its assets are first paid to:
A)Partners as a return of their capital contribution.
B)Creditors to pay partnership debts.
C)Partners who have advanced money to the firm.
D)Representatives of deceased partners.

Question

Quizplus · Accepted Answer

Creditors are prioritized in the payment hierarchy during the dissolution of a partnership to ensure that the partnership's debts are settled before any distributions are made to the partners.

When a Partnership Is Dissolved, Its Assets Are First Paid