44. Which of the following is true about the schedule of safe payments prepared

Question

44. Which of the following is true about the schedule of safe payments prepared in installment liquidations? The schedule assumes that remaining non-cash assets will be worthless. The schedule assumes that when partners have deficit capital balances, their personal assets will be allocated between the partnership deficit and personal debts a. b. c. The schedule determines how available cash balances should be allocated between creditors (to d. Only one schedule needs to be prepared throughout the liquidation process settle partnership liabilities) and partners (to settle partners' capital).

Explanation / Answer

option C is the correct option.

in liquidation process Non cash assets are converted into cash befpre any assets are distributed to creditors and partners and we assume that non cash assets are sold in installments and cash is distributed to the various equity interests as it becomes available.The cash is distributed first to liquidate partnership liabilities and then to satisfy partners capital interests.

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