SCORE: PROFESSOR: NAME: SECTION: Multiple Choice 1. If a partner is insolvent, his personal properties shall first be distributed to the partners by way of additional contributions when the assets of it a. to partnership creditors. partnership were insufficient to settle all obligations. to partnership and separate creditors in the ratio of their loan exposures d. to separate creditors. 2. In a partnership liquidation, the assets of the partnerships shall be applied lastly a. those owing to outside creditors , those owing to the partners with respect to their share of the profits. those owing to the partners with respect to their capital contributions, d. those owing to inside creditors in the form of loans or advances for business expenses by the partners, 3. Which of the following statements is correct regarding a partner's capital deficiency? ro Partners who absorb another's capital deficiency have a legal claim against the deficient partner. b. The partner should contribute to reduce the debit balance to the extent possible. c. If contributions are not possible, the other partners with credit capital balances will be allocated a portion of the debit balance. d. All of these statements are correct. 4. The following is the priority sequence in which liquidation proceeds will be distributed for a partnership: a. Partnership liabilities, partnership loans and partnership capital balances. capital balances. Partnership drawings, partnership liabilities, partnership loans and partnership capital balances. c. Partnership liabilities, partnership loans, partnership drawings and partnership d. Partnership liabilities, partnership capital balances and partnership loans