Ask Question
BusinessBusiness
22 April, 02:25

When a partnership is insolvent and a partner has a deficit capital account balance, that partner is legally required to: Multiple Choice Declare personal bankruptcy. Initiate legal proceedings against the partnership. Contribute cash to the partnership. Deliver a note payable to the partnership with specific payment terms. None of these answer choices are correct. The partner has no legal responsibility to cover the capital deficit balance.

+5
Answers (1)
  1. 22 April, 03:42
    0
    Contribute cash to the partnership.

    Explanation:

    Generally each partner in the partnership has capital balances represented as credit balances.

    Capital balances do not have debit balances, if a partner has deficit balance, it means he has less than the balance as required for his share to be maintained.

    Further if the partnership is declared insolvent, for any reason, the partner having deficit balance shall first bring in cash to add balance to his account, and remove the deficiency in his account.

    Therefore, the correct option is

    Contribute cash to the partnership.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “When a partnership is insolvent and a partner has a deficit capital account balance, that partner is legally required to: Multiple Choice ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
During its first year of operations, Buffalo Industries had credit sales of $3,018,700, of which $409,600 remained uncollected at year-end. The credit manager estimates that $19,460 of these receivables will become uncollectible.
Answers (1)
When you lease a car can you customize it?
Answers (1)
Analyzing an Inventory Footnote Disclosure General Electric Company reports the following footnote in its 10-K report.
Answers (1)
A coal company invests $12 million in a mine estimated to have 20 million tons of coal and no salvage value. it is expected that the mine will be in operation for 5 years. in the first year, 1,000,000 tons of coal are extracted and sold.
Answers (1)
Brian porter's net worth is $110,000, excluding his home. his liabilities of $50,000 include all of his credit card balances and the balance due on his auto loan and home improvement loan.
Answers (1)
New Questions in Business
Which of the following statements is true about using fonts in business documents? A. Sans serif fonts, such as Arial, are best in business letters and emails. B. Use as many different types of fonts in a business letter as you can. C.
Answers (1)
In creating the Wii, how did Nintendo ensure a supply of complements that would motivate customers to adopt its new video game format? a. Nintendo made only a select number of games to run exclusively on the Wii system. b.
Answers (1)
Suppose that B2B, Inc., has a capital structure of 35 percent equity, 16 percent preferred stock, and 49 percent debt. Assume the before-tax component costs of equity, preferred stock, and debt are 14.5 percent, 11.0 percent, and 9.
Answers (1)
C. explain the court's guidelines for deciding discrimination cases.
Answers (1)
Changing workplace procedures tends to be counterproductive
Answers (1)
Home » Business » When a partnership is insolvent and a partner has a deficit capital account balance, that partner is legally required to: Multiple Choice Declare personal bankruptcy. Initiate legal proceedings against the partnership.
Sign Up Forgot Password?