Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 20 - No. 16)
When a partnership is liquidated, which of the following statements is true?
All partnership assets are sold, and liabilities are paid.
Only the assets related to the partners' capital are sold.
The partners' capital accounts are closed and new ones are opened.
The partnership continues to operate with a new management team.
Explanation
Liquidation involves converting assets to cash, paying off liabilities, and distributing any remaining cash to the partners.
Comments (0)
