Asked by Razmin Ellazar on Jul 07, 2024
Verified
When the assets are sold at a loss and one partner cannot make up the deficit, the other partners have no liability to make up the deficit.
Assets Sold
Items of value or resources owned by a company that have been disposed of or sold to another party.
Deficit
Amount by which net income falls short of salary and interest allowance. Also an abnormal, or debit, balance in a partner’s capital account.
- Recognize the accounting treatment for losses during liquidation.
Verified Answer
SN
Sarra NasimJul 12, 2024
Final Answer :
False
Explanation :
In a partnership, all partners are jointly responsible for the liabilities of the partnership. If one partner cannot cover their share of a deficit, the other partners are typically required to make up the difference, depending on the partnership agreement and local laws.
Learning Objectives
- Recognize the accounting treatment for losses during liquidation.
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