Tag: elements of business

Questions Related to elements of business

Upon dissolution, which is the proper order for application of the Firm's assets?
I.     Payment of Debts & Liabilities of the Firm
II.    Payment of Partner's Loan
III.  Payment of Partner's Capital
IV.   Distribution of Surplus to Partners in their Profit Sharing Ratio.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. I, II, III, IV

  2. I, II, IV, III

  3. II, III, IV, I

  4. IV, II, III, I.

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Correct Option: A

Where the partnership is at will, the firm may be dissolved by __________ giving notice in writing to all the other partners of his intention to dissolve the firm.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Any partner

  2. Two partners

  3. Three partners

  4. Four partners

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Correct Option: A
Explanation:

The partnership which is started at the will of the partners where the firm stands dissolved whenever the partners want it to as there is no fixed period or provision regarding the business duration and determination of the firm. Such a type of partnership is known as partnership at will. Any partner can dissolved the firm by giving a prior notice regarding the dissolution mentioning a legitimate reason behind the dissolution. 

Where the partnership is at will, the firm is dissolved as from ______________________-.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. The date mentioned in the notice as the date of dissolution and if date is not mentioned in notice then such notice is void

  2. The date of notice whether date of dissolution is mentioned in notice or not

  3. The date mentioned in the notice as the date of dissolution and if no such date is mentioned, as from the date of communication of the notice

  4. The date when notice is actually received by all other partner

Show answer
Correct Option: C
Explanation:
The partnership which is started at the will of the partners where the firm stands dissolved whenever the partners want it to as there is no fixed period or provision regarding the business duration and determination of the firm. Such a type of partnership is known as partnership at will. 
Any partner can dissolved the firm by giving a prior notice regarding the dissolution mentioning a legitimate reason behind the dissolution.

A partner can transfer his interest so as to substitute the transferee in his place as the partner, without the consent of all the other partners; a member of company cannot transfer his share to any one he likes.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. False

  2. True

  3. Partly true

  4. Partly false

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Correct Option: A
Explanation:
A company is a separate legal artificial body with a name and common seal by the law. In a company, the owners of the company that is the shareholders can transfer their ownership in the stock exchange market whenever they find it necessary without the consent of any other shareholder. 

To whom the property of the firm belongs?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Partners

  2. Working partner of the firm

  3. Firm and not to individual partners

  4. Property belongs to both partners and firm

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Correct Option: C
Explanation:

A partnership basically refers to the contract between two or more people who have agreed to carry on certain business in order to achieve common goals. In the absence of any partnership deed, all the property, rights and interest contribute by the individual partners, all the property acquired in the course of the business and the goodwill of the business is considered as the property of the firm. 

Identify which sentence is correct and which is incorrect.
A. A sub-partner can bind the firm or other partners by his acts.
B. Sub-partner has rights or duties towards the firm and does carry liability for the dents of the firm.
C. Minor partner is entitled to his agreed share
D. Minor can inspect books of account of the firm.
Select the correct answer from the options given.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Sentence A & B are incorrect while sentence C and D are correct

  2. Sentence B & C are incorrect while sentence A & B are correct

  3. Sentence A, B & C are correct while sentence D is incorrect

  4. Sentence B, C & D are correct while sentence A is incorrect

Show answer
Correct Option: A
Explanation:

When a partner of the firm agrees to share his own share of profits with an outsider then it is called sub-partners. They have no rights in the firms' business they just have share in the firms profit or loss and therefore other partners are not bound by the sub-partners act. 

A minor can be admitted as a partner in a partnership firm with the consent of all the partners in the agreement where the minor will share only the profits or gains of the firm and he will have no share in the firm's loss. The minor can even inspect the books of accounts of the firm. 

Which of the following statement is incorrect as to a minor's position in a partnership firm?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Minor is admitted to a share of partnership profits

  2. Minor is personally liable to contribute to the losses

  3. Minor is entitled to a share of the firm's property

  4. Minor can inspect and copy any of the firm's accounts

Show answer
Correct Option: B
Explanation:

A minor can be admitted as a partner in a partnership firm with the consent of all the partners in the agreement where the minor will share only the profits or gains of the firm and he will have no share in the firm's loss. The minor can even inspect the books of accounts of the firm.

Upon dissolution, the firm's assets shall be first applied in paying the debts of the firm to third parties, shall thereafter be applied in payment of partners loan, shall be applied in ___________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

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

  2. Payment of partners loan

  3. Payment of partners capital

  4. Distribution of surplus to partners in profit sharing ratio

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Correct Option: C

After dissolution of firm, any partner or his representative may restrain any other partner or his representative from carrying of similar business in the Firm Name or by using Firm's property for own benefit until _______________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. The affairs of the firm are fully wound up

  2. Public notice of dissolution is given

  3. Dissolution deed is signed by all partners

  4. All of the above

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Correct Option: A

Nitin, a partner of a firm dealing in computers gives an order for win worth Rs. $10,000$ in firm's name. Discuss the liability?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. The firm is liable to pay Rs. $10,000$

  2. The firm can sale the wine to other

  3. It does not relate to normal business of the firm. The firm will not be bound by it as act is not within implied authority of a partner

  4. The firm is liable to pay Rs. $10,000$ and if firm fails to pay then only Nitin will be liable to pay the amount

Show answer
Correct Option: C
Explanation:

Implied Authority is the authority that is not conferred by the mutual agreement between the partners and which is not bind on other partners. 

This authority is acted on the ordinary course of business and the firm is bound by such authority when the act is done in a normal way of carrying on the firm's business. 
These authority is also known as ostensible authority or apparent authority. Since the act is not related to the ordinary business of the firm. The firm is not liable to pay the amount.