Match the terms on the left with the descriptions on the right. Each description may be used

Question:

Match the terms on the left with the descriptions on the right. Each description may be used only once (or not at all).
Terms
1. Dissolution
2. Partner's loss absorption potential
3. Liquidation
4.
Statement of partnership realization and liquidation
5.
Installment liquidation
6.
Cash distribution plan
7. Incorporation of a partnership
8.
Partner's deficit in capital
9. Lump-sum liquidation
10.
Safe payments to Partners

Descriptions of Terms
A. Sale of partnership assets, payment of its creditors, and distribution of any remaining assets to partners.
B. Allocation to other partners in their profit and loss-sharing ratio if the partner is personally insolvent.
C. Schedule that shows how cash is to be distributed as it becomes available during liquidation process.
D. Amount computed by dividing a partner's capital balance by that partner's loss-sharing ratio.
E.Revaluation of a partnership's assets and liabilities to their market values.
F. Change in the legal relationship between partners.
G. End of the normal business function of the partnership.
H.
Liquidation in which all assets are converted into cash over a short time period, enabling all creditors to be paid, with any remaining cash being distributed according to the partner's capital balance.
I. Cash payments to partners computed on the assumption that all noncash assets will be sold for nothing.
J. Presentation, in worksheet form, of the effects of the liquidation process on the balance sheet accounts of the partnership.
K.
Liquidation in which cash is periodically distributed to partners during the liquidation process.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most...
Liquidation
Liquidation in finance and economics is the process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due....
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Advanced Financial Accounting

ISBN: 978-0078025624

10th edition

Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker

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