liquidation of a partnership is a winding up a business activities that has

characterrized by sale of all noncash assets, settlement of all the liabilities,

and distribution of the remaining cash to the partners.This is the terminating of
business by the partners.

Realization is a conversion of non-cash assets. This realization may result to gain

or loss and profit should be divided among partners profit and loss ratio.

In the case of loss on realization it will yield as a partners capital deficiency.

Liquidation of partnership has two methods;

Lump sum Method - Means before partners receive their cash from liquidation there
should be a realization first in non cash asset. All the liabilities should be paid
before the payments of partners.

Installment Method - Realization of non cash assets is accomplished over extended

time. Theres an installment payment for the partners everytime thers a realization
of non cash assets. When theres an available cash of the partnership it would
distributed to the partners.