CHOOSE THE CORRECT ANSWER

1.) In a partnership liquidation, a gain on sale of non-cash assets is:

a.) allocated to the partner with the lowest capital balance

b.) allocated to partnership liabilities

c.) allocated to the partners based on their capital balances

d.) allocated to the partners based on their profit and loss sharing ratio

2.) Which of the following is not one of the basic rights of a shareholder?

a.) The right to participate in the proceeds from the sale of corporate assets upon liquidation

b.) The right to participate in earnings

c.) The right to inspect the accounting records of the corporation

d.) The right to maintain one's proportionate interest in the corporation

3.) It is the process of converting non-cash assets into cash during the liquidation process in a partnership

a.) Marshalling of assets

b.) Dissolution

c.) Realization

d.) Capital deficiency

4.) This results to the reorganization of the partnership as a new unit and does not necessitate the winding up of business affairs.

a.) Right to share in the profits of the partnership

b.) Liquidation

c.) Right to share in the assets of the partnership

d.) Dissolution

5.) In the final liquidation transaction, the remaining cash is distributed to the partners. The partners share in the cash according to their

a.) withdrawals

b.) cash balance

c.) profit and loss ratio

d.) capital balances