A deficiency of creditors arises only when a firm does not pay off the creditors after selling the assets and using the partner’s private assets. During such situations, the firm can follow two procedures:By transferring the deficiency to the partner’s capital accountBy transferring  the deficiency to the deficiency’s accountDuring the first procedure, the creditors will get paid by the cash available at the firm which even includes the partner’s contribution. During the second procedure, the firm will create a separate account to pay the creditors off.