If partner X has a debit balance in capital and the partnership is dissolving which of the following statement would be true:

Question

Quizplus · Accepted Answer

When a partnership is dissolving and a partner has a debit balance in their capital account, it means that the partner has a deficit and owes money to the partnership. The partners who absorb this debit balance, meaning they agree to take on the deficit or cover the loss, would have claims against partner X to recover the amount they covered on his behalf. This is because they are essentially covering Partner X's share of the liabilities or losses, and thus, would seek reimbursement from Partner X for this amount. The other options are not standard practices or necessarily true in the context of partnership dissolution.

If Partner X Has a Debit Balance in Capital and the Partnership