Partnership

Dissolution

Medium

Which statements are true about the dissolution of a partnership-

(A) Dissolution of a partnership is different from dissolution of a firm.

(B) A partnership is dissolved when there is a death of a partner.

(C) A firm is compulsorily dissolved when a partner decide to retire.

(D) Dissolution of partnership can not take place without intervention of the court.

Choose the correct answer from the options given below:

(A), (B) and (D) only

(A) and (B) only

(B), (C) and (D) only

✅ Correct Option: 2

Analysis of Each Statement

Statement (A): Dissolution of a partnership is different from dissolution of a firm.

✓ TRUE

Dissolution of Partnership means change in the relationship among existing partners. The firm continues with remaining/new partners.

Dissolution of Firm means complete termination of the business and relationship among all partners.

Statement (B): A partnership is dissolved when there is a death of a partner.

✓ TRUE

Death of a partner brings an end to the existing partnership agreement, causing dissolution of partnership. The original partnership relationship cannot continue with a deceased partner. However, the firm may continue if remaining partners agree to reconstitute.

Statement (C): A firm is compulsorily dissolved when a partner decides to retire.

✗ FALSE

Retirement of a partner leads to dissolution of partnership only, not dissolution of firm. The firm can continue its operations with the remaining partners. Dissolution of firm is not compulsory upon retirement.

Statement (D): Dissolution of partnership cannot take place without intervention of the court.

✗ FALSE

Dissolution of partnership commonly occurs without court intervention through:

Mutual agreement among partners
Death of a partner
Retirement of a partner
Admission of a new partner
Insolvency of a partner

Court intervention is required only in specific disputes or disagreements among partners.

Correct Statements: (A) and (B) only

Answer: Option 2

2025: 30 May Shift 2

In case of the dissolution of a firm, the firm ceases to conduct business and has to settle its accounts. Arrange in the correct manner and order the assets of the firm, including any sum contributed by the partners to make up for deficiencies of capital:

(A) In paying to each partner proportionately what is due to him on account of capital

(B) In paying the debts of the firm to the third parties

(C) In paying each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e. partner's loan)

(D) The residue, if any, shall be divided among the partners in their profit sharing ratio

Choose the correct answer from the options given below:

2025: 4 June Shift 2

A partnership is not dissolved when:-

2023: 20 June Shift 2

The dissolution of Partnership may take place due to:

A. Retirement of Partner

B. Death of Partner

C. Insolvency of Partner

D. Admission of New Partner

E. Completion of Venture, if partnership formed for that purpose

Choose the correct answer from the options given below:

2026: 19 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Dissolution expenses of Rs. 7,800 were paid by partner.	(I) Realisation A/c ......Dr\nTo Bank A/c
(B) When a creditor accepts a fixed asset in payment of his dues.	(II) No Entry
(C) There was an outstanding bill for repairs which had to be paid.	(III) Bank A/c ........Dr\nTo Realisation A/c
(D) There was an unrecorded investment sold.	(IV) Realisation A/c .... Dr\nTo Partner's Capital Account

Choose the correct answer from the options given below so that all items are matched:

2024

On dissolution of a firm, bank overdraft is transferred to:

2025: 22 May Shift 1

Dissolution of a firm takes place on the happening of certain contingencies in the following cases:

(A) By the death of a partner

(B) By the adjudication of a partner as an insolvent

(D) If constituted for a fixed term, by the expiry of that term

Choose the correct answer from the options given below:

Solution

Analysis of Each Statement

Correct Statements: (A) and (B) only

Related questions:

Keyboard Shortcuts

CUET Accountancy Past Year Questions (Topic-Wise)