Partnership

Dissolution

Easy

common

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.

✅ Correct Option: 4

Section 39 of the Partnership Act, 1932 states that the dissolution of partnership between all the partners of a firm is called the dissolution of the firm.

This section distinguishes between:

Dissolution of Partnership → Changes in the relationship among some partners (the firm may continue)
Dissolution of Firm → Complete termination when partnership dissolves between ALL partners (the firm ceases to exist)

When the partnership relationship ends among all partners simultaneously, it results in the complete winding up of the firm's affairs and closure of business operations.

2025: 3 June Shift 1

A firm is dissolved compulsorily in the following cases:

(A) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract

(B) when the business of the firm becomes illegal

(D) when some event has taken place which makes it unlawful for the partners to carry on the business of the firm in partnership

Choose the correct answer from the options given below:

2025: 30 May Shift 1

All assets (except cash/bank and fictitious assets) are transferred to the__________ side of __________Account.

2025: 30 May Shift 1

Unrecorded liabilities when paid are shown in:

2025: 22 May Shift 2

On the dissolution of a firm, creditors is transferred to:

2026: 20 May Shift 1

Match List-I with List-II

List-I (Cases for payment of realisation expenses)	List-II (Journal entry)
(A) When realisation expenses are incurred and paid by the firm	(I) Realisation A/c Dr. To Partner's Capital A/c
(B) When realisation expenses are paid by a partner on behalf of the firm	(II) No entry is required
(C) When a partner has agreed to bear the realisation expenses and the realisation expenses are paid by the firm	(III) Realisation A/c Dr. To Bank A/c
(D) When a partner has agreed to bear the realisation expenses and the partner himself pays the realisation expenses.	(IV) Partner's Capital A/C Dr. To Bank A/c

Choose the correct answer from the options given below:

2025: 31 May Shift 1

Unrecorded liabilities when paid are shown in:

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.

Solution

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