Which of the following is TRUE of a liquidation of a partnership?
A) It allocates the gain or loss on sale of assets to the partners' capital accounts based on the profit-and-loss-sharing ratio.
B) The remaining cash after paying all liabilities are paid to the partners based on their profit-and-loss-sharing agreement.
C) Before a business is liquidated, its books should not be adjusted or closed.
D) It involves the selling of short-term liquid assets and does not involve the sale of fixed assets.

Question

Quizplus · Accepted Answer

During the liquidation of a partnership, any gain or loss from the sale of assets is allocated to the partners' capital accounts based on their profit-and-loss-sharing ratio.

Which of the Following Is TRUE of a Liquidation of a Partnership