If the withdrawing partner receives more cash than their capital account balances, the excess is debited to the capital accounts of the remaining partners according to their income and loss ratios specified in the partnership agreement.

Question

Quizplus · Accepted Answer

This statement is true. Any excess amount received by the withdrawing partner is distributed among the remaining partners' capital accounts based on their income and loss ratios, as stated in the partnership agreement.

If the Withdrawing Partner Receives More Cash Than Their Capital