Partnership

Dissolution

Medium

Financial Statements

Match List-I with List-II

List-I List-II
(A) Dissolution of firm by agreement (I) When a partner becomes insane
(B) Compulsory dissolution of firm (II) With the consent of all partners
(C) Dissolution of firm by notice (III) When business of a firm becomes illegal
(D) Dissolution of firm by Court (IV) At the request of any one partner

Choose the correct answer from the options given below:

List-I	List-II
(A) Dissolution of firm by agreement	(I) When a partner becomes insane
(B) Compulsory dissolution of firm	(II) With the consent of all partners
(C) Dissolution of firm by notice	(III) When business of a firm becomes illegal
(D) Dissolution of firm by Court	(IV) At the request of any one partner

(A) - (II), (B) - (III), (C) - (I), (D) - (IV)

(A) - (II), (B) - (III), (C) - (IV), (D) - (I)

(A) - (I), (B) - (II), (C) - (IV), (D) - (III)

(A) - (III), (B) - (IV), (C) - (I), (D) - (II)

✅ Correct Option: 2

Under the Partnership Act, 1932, there are different modes through which a partnership firm can be dissolved:

Dissolution of firm by agreement occurs when all the partners mutually decide to end the partnership. This requires unanimous consent of all partners to dissolve the firm.

Match: (A) → (II)

Compulsory dissolution of firm takes place automatically by operation of law in certain situations. The firm must be dissolved when the business becomes unlawful or illegal (such as when a law is passed making the business illegal), or when all partners except one become insolvent.

Match: (B) → (III)

Dissolution of firm by notice applies to partnerships at will. Any partner can dissolve such a firm unilaterally by giving written notice of intention to dissolve to all other partners. This doesn't require consent of other partners.

Match: (C) → (IV)

Dissolution of firm by Court happens when a partner files a suit in court for dissolution. The court may order dissolution on various grounds including: when a partner becomes of unsound mind (insane), suffers from permanent incapacity, is guilty of misconduct affecting the business, persistently breaches partnership agreement, or when the business can only be carried on at a loss.

Match: (D) → (I)

Therefore, the correct matching is: (A) - (II), (B) - (III), (C) - (IV), (D) - (I)

Correct Answer: Option 2

2025: 3 June Shift 2

Arrange the following in correct order in which assets of the firm can be used in the settlement.

(A) Residue shall be divided between the partners in their profit sharing ratio.

(B) In paying the partners proportionately what is due to him/her on account of capital.

(D) In paying the debts of the firm to the third parties.

Choose the correct answer from the options given below:

2026: 31 May Shift 1

Which of the following are credited to the Realisation Account?

A. Assets taken over by a partner

B. Liabilities paid by the firm

C. Sale of assets

D. Realisation of Unrecorded assets

Choose the correct answer from the options given below:

2026: 20 May Shift 1

A, B and C constituted a partnership to carry out a venture to build offices for Zakash Office Sites Ltd. On the completion of venture under which way the dissolution of a firm will takes place?

2022: 15 July Shift 2

Identify the item credited to Realisation Account in the event of dissolution of a partnership firm.

2026: 20 May Shift 1

Under which of the following cases, the Court can order the dissolution of a partnership firm?

(A) When a partner persistently commits breach of partnership agreement.

(B) When a partner has transferred the whole of his interest in the firm to a third party.

(D) When the business of the firm cannot be carried on except at a loss.

Choose the correct answer from the options given below:

2025: 4 June Shift 2

In case of Fixed Capital Method, at the time of dissolution of a firm, An un-recorded asset are taken over by a partner, which Journal Entry will be recorded in the books of the Partnership Firm :-

Solution

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