When a partnership is liquidated:
A) Any gain or loss on liquidation is allocated to the partner with the highest capital account balance.
B) The business may continue to operate.
C) Liabilities are paid or settled.
D) Any remaining cash is distributed to the partners equally.
E) Noncash assets are distributed to partners.

Question

Quizplus · Accepted Answer

During the liquidation of a partnership, liabilities must be paid or settled before any remaining assets are distributed to the partners.

When a Partnership Is Liquidated