Multiple Choice Question 109 The liquidation of a partnership is a process containing the following steps: 1. Pay partnership liabilities in cash. 2. Allocate the gain or loss on realization to the partners on their income ratios. 3. Sell noncash assets for cash and recognize a gain or loss on realization. 4. Distribute remaining cash to partners on the basis of their remaining capital balances. Identify the proper sequencing of the steps in the liquidation process. O 1, 4, 3, 2. O 3, 2, 4, 1. O 3, 2, 1, 4. 1, 3, 2, 4. Multiple Choice Question 106 If a partner has a capital deficiency and does not have the personal resources to eliminate it, O the other partners will have to absorb the capital deficiency on the basis of their respective income sharing ratios. neither the creditors nor the other partners will have to absorb the capital deficiency. O the other partners will absorb the capital deficiency on the basis of their respective capital balances. o the creditors will have to absorb the capital deficiency. Multiple Choice Question 101 In the liquidation of a partnership, any partner who has a capital deficiency O is not obligated to make up the capital deficiency. O will receive a cash distribution only on the basis of his or her income-sharing ratio. has a personal debt to the partnership for the amount of the deficiency. O is automatically terminated as a partner