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JAMB Principles of Accounts 2004 Question 38

Question 38

Partnership Admission, Retirement and Dissolution

On dissolution, the final distribution of cash to partners is based on

  1. A.partnership agreement
  2. B.Articles of Association
  3. C.goodwill
  4. D.capital balances
Show the answer and explanation

Answer: D (capital balances)

Explanation

After assets are sold and liabilities paid, each partner receives the final balance on his capital account.