When a partnership liquidates and there is not enough cash to pay the liabilities,then the partners must contribute cash on the basis of their profit-and-loss-sharing ratio to cover unpaid debts.

Question

Quizplus · Accepted Answer

This is true as partners are personally liable for the debts of the partnership and are obligated to contribute to cover any unpaid debts in proportion to their profit-and-loss-sharing ratio.

When a Partnership Liquidates and There Is Not Enough Cash