Before distributing any remaining cash to partners in a partnership liquidation it is necessary to do each of the following except

Question

Quizplus · Accepted Answer

Allocating the gain or loss to the partners based on their capital balances is necessary before distributing any remaining cash to partners in a partnership liquidation, so this statement is incorrect. However, it is not necessary to allocate the gain or loss based on their capital balances - this can also be done based on another agreed-upon method, such as the percentage of ownership or a fixed distribution ratio. Therefore, statement C is the correct answer.

Before Distributing Any Remaining Cash to Partners in a Partnership