Question

Treatment of bank overdraft when all partners are insolvent

Answer 1

Answer:

If the overdraft is not repayable on demand, changes in the balance are treated as a financing activity, not a change in cash or cash equivalents. If they're treated as a financing activity: an increase in the overdraft will be a source of finance. a repayment of the overdraft is a repayment of a borrowing

Answer 2

Explanation:

What happens if a Partner becomes insolvent or goes Bankrupt? If you, or any one of the partners, goes Bankrupt all of the bankrupt person's personal assets including their stake in the business partnership comes under the control of a Bankruptcy Trustee.

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