When a partnership is liquidated,which of the following is not true?
A)Noncash assets are converted to cash.
B)Any gain or loss on liquidation is allocated to the partners' capital accounts using the income and loss sharing ratio.
C)Liabilities are paid or settled.
D)Any remaining cash is distributed to the partners based on their capital balances.
E)Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio.

Question

Quizplus · Accepted Answer

The statement "Any remaining cash is distributed to partners in accordance with the income- and loss-sharing ratio" is not a correct statement. The correct statement is "Any remaining cash is distributed to partners based on their capital balances."

When a Partnership Is Liquidated,which of the Following Is Not