The process of going out of business by selling the entity's assets,paying its liabilities,and distributing any remaining cash to the partners based on their equity balances is known as liquidation.

Question

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This statement correctly describes the process of liquidation, which is the orderly and systematic winding up of a business entity's affairs. During liquidation, the assets of the entity are sold off to raise cash to pay off its liabilities, including any outstanding debts or obligations to creditors, employees, or other stakeholders. Once all the debts have been settled, any remaining cash or assets are distributed to the partners in accordance with their equity balances, and the entity is officially dissolved.

The Process of Going Out of Business by Selling the Entity's