Accounting for Partnership Liquidation 305 Score: PROFESSOR Date Section: Multiple Choice (Theory) Problem 6-3 n: Encircle the letter that corresponds to the best answer of terminating the business, selling the ities and disbursing the remaining cash to the partners I, The process assets, paying the is called a. dissolution b. formation of a partnership Ic. liquidation. I d. withdrawal. i2. Which life of the partnership ended when it is under liquidation? ! a Legal life only I b. Economic life only c. Useful life d. Legal and economic life I 3. The selling of noncash assets for cash in partnership liquidation, any difference between book value and the cash proceeds is called a. net profit or loss on sale b. gain or loss on realization. Ic. capital gain or loss. d. sales differential value 1 4. The main characteristic of a lump sum liquidation done in one transaction is that all the a. assets are sold in one transaction. I b. liabilities are paid in one transaction Ic. cash available to partners is distributed to them in one transaction. t d. assets are sold in one transaction and all the available cash is distributed to creditors and partners in one transaction. . Which of the following financial statements remains open as the partnership liquidation process begins? . Statement of Financial Position b. Statement of Comprehensive Income C. Statement of Cash Flows i d. Statement of Partners' Capital