When a partnership is liquidated, the assets are sold and the cash realized is applied first to the:
A) claims of creditors.
B) partner with the largest investment.
C) partners' equity accounts.
D) partners according to their ownership interests.

Question

Quizplus · Accepted Answer

When a partnership is liquidated, the first priority is to pay the claims of creditors before distributing any remaining assets among the partners.

When a Partnership Is Liquidated, the Assets Are Sold and the Cash