Partnership

Dissolution

Medium

Match List-I with List-II

List-I List-II
(A) Compulsory Dissolution (I) Partner becomes insane
(B) Dissolution by notice (II) Death of a partner
(C) Dissolution by Court (III) Business become illegal
(D) Dissolution on certain contingencies (IV) Partnership at will

Choose the correct answer from the options given below:

List-I	List-II
(A) Compulsory Dissolution	(I) Partner becomes insane
(B) Dissolution by notice	(II) Death of a partner
(C) Dissolution by Court	(III) Business become illegal
(D) Dissolution on certain contingencies	(IV) Partnership at will

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

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

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

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

✅ Correct Option: 4

Under the Partnership Act, different modes of dissolution apply in different circumstances:

Compulsory Dissolution occurs when the law mandates dissolution. This happens when the business becomes illegal due to changes in law or if all partners except one become insolvent. When business becomes illegal, the partnership must dissolve immediately.

Match: (A) → (III)

Dissolution by Notice applies exclusively to partnership at will (where no fixed duration is specified). Any partner can dissolve the firm by giving written notice to all other partners. This is the only mode where unilateral dissolution is permitted.

Match: (B) → (IV)

Dissolution by Court happens when a partner files a suit seeking dissolution. The court grants dissolution on specific grounds including when a partner becomes of unsound mind (insane), permanently incapable of performing duties, guilty of misconduct, or persistently breaches the agreement.

Match: (C) → (I)

Dissolution on Certain Contingencies occurs automatically when specific events mentioned in Sections 42 of the Partnership Act happen - death of a partner, insolvency of a partner (subject to agreement), or expiry of the fixed term. Unless the partnership deed states otherwise, these contingencies trigger automatic dissolution.

Match: (D) → (II)

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

Option 4 is correct.

2026: 23 May Shift 2

In case of dissolution of a firm, the partners loan A/c is transfer to ________

2026: 12 May Shift 1

After transferring liabilities like creditors and bills payables to the Realisation Account, in the absence of any information regarding their payment, such liabilities are treated as:

2026: 29 May Shift 2

On dissolution of the firm, Partners Capital Account are closed through:

2026: 11 May Shift 1

In case of dissolution of a firm, the assets of the firm, including any sum contributed by the partners to make up deficiencies of capital, shall be applied in the following manner and order:

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

B. The residue, if any, shall be divided among the partners in their profit sharing ratio.

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. In paying the debts of the firm to third parties.

Choose the correct sequence from the options given below:

2025: 3 June Shift 1

Romesh took over stock at Rs.8,100, which is 10% less then its book value. The book value of the stock was .........

2025: 26 May Shift 2

Arrange the following in correct sequence for application of assets in the Settlement of Accounts in Case Of Dissolution of a Partnership firm -

(A) The balance should be applied to repay loans made by the partners to the firm.

(B) The assets of the firm should be used in paying the debts of the firm to third parties.

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

Choose the correct answer from the options given below:

Solution

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