Partnership

Accounting

Medium

common

Which of the following statements results in the reconstitution of a partnership firm :-

(A) Change in profit sharing ratio among partners.

(B) Admission of a new partner.

(C) Dissolution of a partnership firm.

(D) Dissolution of a partnership.

Choose the correct answer from the options given below:

(A), (B) and (C) only

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

(A), (B), (C) and (D)

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

✅ Correct Option: 2

Reconstitution of partnership occurs when there is a change in the existing partnership agreement, but the firm continues its operations with modified terms.

Let's examine each statement:

(A) Change in profit sharing ratio among partners → This is reconstitution. The existing partners continue but agree to share profits in a new ratio. The firm continues.

(B) Admission of a new partner → This is reconstitution. A new partner joins, changing the partnership composition. The firm continues with the new partner.

(C) Dissolution of a partnership firm → This is NOT reconstitution. When the firm dissolves, the entire business comes to an end. All assets are sold, liabilities are settled, and the firm ceases to exist.

(D) Dissolution of a partnership → This is reconstitution. Dissolution of partnership means the relationship between existing partners changes (like retirement or death of a partner), but the firm can continue with remaining or new partners. The business doesn't end.

The crucial distinction is between dissolution of partnership and dissolution of partnership firm:

Dissolution of partnership → Partnership relationship changes, firm continues → Reconstitution
Dissolution of firm → Firm ends completely → Not reconstitution

Therefore, statements (A), (B), and (D) result in reconstitution.

Correct Answer: Option 2

2025: 31 May Shift 1

If partnership deed is silent on the profit sharing ratio: interest @_____ per annum is allowed on loans advanced by partners-

2026: 6 June Shift 1

In fixed capital method, all adjustments for partner's drawings, salary, interest on capital, etc. are posted in the:

2026: 24 May Shift 1

Profit and Loss Appropriation Account has the following features:

(A) It is merely an extension of the Profit and Loss Account of the firm.

(B) It shows how the profits are appropriated or distributed among the partners.

(D) All adjustments in respect of partner's salary, partner's commission, interest on capital, interest on drawings, etc. are made through this account.

Choose the correct answer from the options given below:

2026: 23 May Shift 2

Select the correct options from the following in case there is no partnership deed:

A. Profit and losses of the firm are shared equally.

B. Interest on capital is to be paid at the rate of 6 percent per annum.

C. Interest on the partner's loan is to be paid at the rate of 6 percent per annum.

D. No interest is to be charged on the drawings made by the partners.

Choose the correct answer from the options given below:

2025: 14 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Sacrificing ratio	(I) Dissolution of Partnership
(B) Gaining Ratio	(II) Admission of a New Partner
(C) Executors Account	(III) Retirement of a Partner
(D) Realisation Account	(IV) Death of a Partner

Choose the correct answer from the options given below:

2026: 31 May Shift 1

Reconstitution of a partnership firm takes place when:

Solution

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