In which of the following the Economic relationship between the partners comes to an end? Option 1: Dissolution of partnership Option 2: Dissolution of partnership firm Option 3: Retirement of a partner Option 4: Death of a partner

Answer: Dissolution of partnership firm. Solution: Dissolution of Partnership occurs when there is a change in the existing relationship between partners. This happens due to: - Retirement of a partner - Death of a partner - Admission of a new partner - Change in profit-sharing ratio In dissolution of partnership, the business continues with a reconstituted partnership. The economic relationship is restructured, not ended. The remaining or new set of partners continue the firm's operations. Dissolution of Partnership Firm occurs when the business itself is completely closed down. This involves: - Closure of all business operations - Sale of all assets - Payment of all liabilities - Settlement of partners' accounts - Complete winding up of the firm When the firm dissolves, the economic relationship between all partners comes to an end completely. No partner continues the business under the same firm name. In case of retirement or death of a partner, only one partner exits while others continue. The firm carries on with the remaining partners, so the economic relationship among them doesn't end. Therefore, the economic relationship between partners ends only upon Dissolution of Partnership Firm, where the business entity itself ceases to exist and all partners part ways permanently.

Partnership

Dissolution

Easy

In which of the following the Economic relationship between the partners comes to an end?

Dissolution of partnership

Dissolution of partnership firm

Retirement of a partner

Death of a partner

✅ Correct Option: 2

Dissolution of Partnership occurs when there is a change in the existing relationship between partners. This happens due to:

Retirement of a partner
Death of a partner
Admission of a new partner
Change in profit-sharing ratio

In dissolution of partnership, the business continues with a reconstituted partnership. The economic relationship is restructured, not ended. The remaining or new set of partners continue the firm's operations.

Dissolution of Partnership Firm occurs when the business itself is completely closed down. This involves:

Closure of all business operations
Sale of all assets
Payment of all liabilities
Settlement of partners' accounts
Complete winding up of the firm

When the firm dissolves, the economic relationship between all partners comes to an end completely. No partner continues the business under the same firm name.

In case of retirement or death of a partner, only one partner exits while others continue. The firm carries on with the remaining partners, so the economic relationship among them doesn't end.

Therefore, the economic relationship between partners ends only upon Dissolution of Partnership Firm, where the business entity itself ceases to exist and all partners part ways permanently.

2025: 27 May Shift 2

Which Journal Entry will be recorded for realization of unrecorded asset at the time of dissolution of a Partnership Firm.

2025: 13 May Shift 2

Arrange the following in correct order in which assets of the firm can be used in there 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:

2025: 31 May Shift 1

According to section .......... of the Partnership Act, 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.

2025: 31 May Shift 1

On dissolution of the firm, partner's capital accounts are closed through:

2025: 3 June Shift 1

Partner's current accounts are transferred to respective Partners' _____________________.

2026: 13 May Shift 2

Choose the correct sequence of Closing of Ledger Accounts at the time of dissolution of a Partnership Firm.

(A) Closing of Cash at Bank & Cash in hand account.

(B) Realisation of Assets and payment of external liabilities recorded in Realisation Account.

(D) Closing Partner's capital account by settling the final payment to partners or receipt from partners.

Choose the correct answer from the options given below:

In which of the following the Economic relationship between the partners comes to an end?

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