PARTNERSHIP LIQUIDATION

Partnership dissolution is always followed by liquidation

• TRUE

• FALSE

The final distribution of cash to the partners shall be made based on their profit and loss sharing agreement.

• TRUE

• FALSE

In the lump-sum liquidation, the distribution of cash to partners is made only after all the non-cash assets have been realized, the total amount of gain or loss on realization has been determined and distributed and all liabilities have been paid.

• TRUE

• FALSE

In a statement of liquidation, there are only two classes of assets - cash and other assets.

• TRUE

• FALSE

After the distribution of cash to partners in a partnership liquidation, the business would have zero assets, liabilities and owners' equity.

• TRUE

• FALSE

The liquidation ratios will always be equal to the profit and loss ratio of partners

• TRUE

• FALSE

If the deficient partner is insolvent, his deficiency will be absorbed by the other partners distributed according to their profit and loss ratio.

• TRUE

• FALSE

When the personal assets of a partner exceed his personal liabilities, the partner is considered solvent but only to the extent of the excess.

• TRUE

• FALSE

Non-cash assets that are not sold should be written off as a loss and such loss is divided to the partners equally.

• TRUE

• FALSE

The right of offset is exercised when a partner's capital account reports a debit balance and he has at the same time a loan to the partnership.

• TRUE

• FALSE