Question

In piecemeal distribution amounts realised from assets are used to settle the liabilities in the following order
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Answer 1

Explanation:

On a gradual realisation of assets, the cash is distributed in the following order: 1. The debts of the firm to the third parties (outside liabilities) must be paid first. 2. After the creditors, have been paid off, the amount due to a partners as loan should be paid.

Answer 2

Realisation Expenses, Outside Liabilities, Partners Loans, Partners capitals.

• Liabilities are paid as and when funds from asset sales are received.
• The liabilities are also settled gradually or in installments.
• In other words, the money is given out gradually rather than all at once. The term "piecemeal distribution" refers to this.
• Expenditures that can be recovered in the form of cash or credit are referred to as realization expenses.
• Liabilities that stem from your personal life rather than your business are known as outside obligations or personal liabilities.
• Priority must be given to paying the company's external liabilities.
• The sum owed to a partner as a loan should be paid when the debtors have been satisfied

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