Tag: dissolution of firm

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Questions Related to dissolution of firm

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

A director may be removed before the expiry of his term by passing a/an :

  1. Ordinary resolution

  2. Special resolution

  3. Resolution requiring special notice

  4. Any of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

According to Section 115 of the Companies Act, A special notice with the intention of removing a director by the specified number of members of the company has to be passed.  A special notice required to be given to the company shall be signed by members holding not less than 1 percent of the  total voting power. Opportunity can be given to the director to submit his statement in writing against his removal from company. 

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Upon the dissolution of a firm, in piecemeal distribution of cash, cash is distributed among partners in the :

  1. Sacrificing ratio

  2. Ratio of capitals

  3. Profit sharing ratio

  4. None of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In piecemeal distribution of cash, there are two methods:
1. Proportionate Capital Method: The partners whose capitals are more than the proportionate to other partner's capital should first be refunded so much as to bring down their capitals to proportionate levels. 
2. Maximum Loss Method: An alternative method of piecemeal distribution is to calculate the maximum possible loss on every realisation after the outside liabilities and the partner's loan has been paid.  

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Unrecorded liability when paid on dissolution of a firm is debited to ____________ .

  1. realisation A/c

  2. partner's A/c

  3. partner's Capital A/cs

  4. balance sheet
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

When an unrecorded liability is paid during the dissolution of a firm, it is treated as a realization expense and debited to the Realisation Account.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

In case of creditor's voluntary winding up, the liquidators are appointed by __________.

  1. Members

  2. Creditors

  3. Both (A) and (B)

  4. Court
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Voluntary winding up is the process in which a company is unable to carry out it operations or the period for carrying the operations expires or if it is unable to meet its financial obligations. It can carry this process either by passing special resolution or by ordinary resolution. There are two kinds of voluntary winding up. They are;

  1. Member's voluntary winding up.
  2. Creditors voluntary winding up.
Under creditors voluntary winding up declaration of solvency is not required because the company first only becomes unable to pay the liabilities. Under this, the copy of the resolution is sent to the registrar within 10 days. The liquidators are appointed by the members as well as the members of the company.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

A court can order the dissolution of the partnership firm in the following cases except ___________.

  1. when a partner transfer his share to a third party without the consent of other partners

  2. on the death of partner

  3. when the number of partner exceeds $20$

  4. on the expiry of the period for which it was formed
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

According to the provisions of the Indian Partnership Act, 1932, a court can order the dissolution of the partnership firm in the following cases:

  1. On the death of the partner.
  2. When the number of partner exceeds 20.
  3. On the expiry of the period for which it was formed.
When a partner transfer his share to a third party without the consent of others only the partner is dissolved from the firm and not the whole firm.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Which of the following is the case of voluntary dissolution of partnership?

  1. Dissolution by consent

  2. <span>Dissolution&nbsp;</span><span>by agreement</span>

  3. <span>Dissolution&nbsp;</span><span>by notice</span>

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Section 40 provides for dissolution of a firm by voluntary acts of the partners. It lays that, "a firm may be dissolved with the consent of all partners or in accordance with a contract between the partners."

Dissolution by voluntary act of partners includes the following modes :
1. Dissolution by Consent
2. Dissolution by agreement
3. Dissolution by notice

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

When a company is wound up at the instances of either the members or the creditors, the winding up is termed as _____________.

  1. Compulsory winding up

  2. Voluntary winding up

  3. Winding up subject to supervision of court

  4. None of the Above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Voluntary winding up is the process in which a company is unable to carry out it operations or the period for carrying the operations expires otr if it is unable to meet its financial obligations. It can carry this process either by passing special resolution or by ordinary resolution. Under creditor's voluntary winding up the board of directors are not in position to give declaration on the liability of the company. Hence, they call meeting to of creditors to wind up the company.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

Who is treated as liquidator in Creditors' voluntary winding up?

  1. Person appointed by member

  2. Person appointed by creditors

  3. Person appointed by court

  4. Person appointed by directors
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Voluntary winding up is the process in which a company is unable to carry out it operations or the period for carrying the operations expires or if it is unable to meet its financial obligations. It can carry this process either by passing special resolution or by ordinary resolution. There are two kinds of voluntary winding up. They are;

  1. Member's voluntary winding up.
  2. Creditors voluntary winding up.
Under creditors voluntary winding up declaration of solvency is not required because the company first only becomes unable to pay the liabilities. Under this, the copy of the resolution is sent to the registrar within 10 days. The liquidators are appointed by the members as well as the members of the company.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

In which of the following ways a partnership firm may be dissolved?
I. Dissolution by Agreement
II. Compulsory dissolution
III. Dissolution by Notice
IV. Dissolution by court

  1. I and II.

  2. I and III.

  3. III and IV.

  4. I, II, III and IV.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

According to the provisions of the Indian Partnership Act, 1932, dissolution of a firm means closing down the undertaking, suspending permanently the activities of a partnership business or a complete breakdown of a partnership. It can be dissolved in the following ways:

  1. Dissolution by agreement.
  2. Compulsory dissolution.
  3. Dissolution by notice.
  4. Dissolution by court.

Multiple choice business organisation and correspondence partnership 4 - dissolution of a partnership firm meaning of dissolution of partnership firm modes of dissolution of firm dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities

The dissolution of partnership may take place by ____________________.

  1. Change in existing profit-sharing ratio among partners

  2. Admission of a new partner

  3. Retirement of a partner

  4. All of the above
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Dissolution of partnership changes the existing relationship between partners but the firm may continue its business as before. The dissolution of partnership may take place in any of the following ways:

1. Change in existing profit sharing ratio among partners
2. Admission of a new partner
3. Retirement of a partner
4. Death of a partner
5. Insolvency of a partner
6. Completion of the venture, if partnership is formed for that.
7. Expiry of the period of partnership, if partnership is for a specific period of time