Tag: dissolution of firm

Quizzes (6) Questions (116)

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

At the time of dissolution of the firm, The assets and liabilities appearing in the Balance sheet transferred to ____________ .

  1. Revaluation Account

  2. Realisation Account<div>
    </div>

  3. Partner's Capital Accounts

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

At the time of dissolution of the firm, the assets and liabilities appearing on the Balance Sheet are transferred to the Realisation Account. When a firm decides to discontinue its operations, all assets need to be disposed off and all liabilities need to be discharged. For this purpose, a Realisation account is opened where all the assets, excluding cash at hand and bank, are shown on the debit side at their book values and all the external liabilities are shown on the credit side at their book value. Any sale of assets or discharge of liabilities is also shown in this 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

Which of the following is the assumption of the MM model on dividend policy?

  1. The firm is an all-equity firm

  2. The investments of the firm are financed solely by retained earnings

  3. The firm has an infinite life

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

The Modigliani-Miller (MM) theorem on dividend policy assumes perfect capital markets, rational investors, no taxes, and that the firm has an infinite life.

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

Garner Vs. Murray rule applies in case of _________________.

  1. Admission of a partner

  2. Dissolution of a firm

  3. Retirement of a partner

  4. Death of a partner
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Garner vs. Murray rule is a legal precedent used in partnership accounting to determine how solvent partners should share the deficiency of an insolvent partner upon dissolution.

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

There are _________ kinds of voluntary winding up.

  1. $2$

  2. $3$

  3. $4$

  4. $5$
Reveal answer Fill a bubble to check yourself
A 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.

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

Winding up by the court comes under _________.

  1. <span>section</span>&nbsp;$484-521$

  2. <span>section</span>&nbsp;$433$

  3. <span>section</span>&nbsp;$434$

  4. <span>section</span>&nbsp;$475$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to the Indian Companies Act, 2013, if a company do not follow certain rules and regulations as given by the act then it has to wind up its operations. Winding up is done by the court. It comes under section 433.

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

Dissolution of a firm means __________.

  1. Closing down the undertaking

  2. Suspending permanently the activities of a partnership business

  3. Complete breakdown of a partnership

  4. All of the Above
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.

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

Voluntary winding up comes under __________.

  1. Section $433$

  2. <span>Section</span>&nbsp;$484-521$

  3. <span>Section</span>&nbsp;$428$

  4. <span>Section</span>&nbsp;$473$
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 its 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. It comes under section 484-521 of the Indian Companies Act, 2013.

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 between all partners of a firm is called _________.

  1. The dissolution of the firm

  2. Compulsory dissolution

  3. Dissolution by notice

  4. Dissolution by government
Reveal answer Fill a bubble to check yourself
A 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. Hence, the dissolution of partnership between all partners of a firm is called the dissolution of the 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 are true or false?
(a) Dissolution of a firm is a wider concept
(b) It includes dissolution of the partnership also

  1. Both (a) and (b) are true.

  2. Both (a) and (b) are false.

  3. (a) is true, but (b) is false.

  4. (a) is false, but (b) is true.
Reveal answer Fill a bubble to check yourself
A 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. The dissolution of partnership between all partners of a firm is called the dissolution of the firm. Hence, it is wider concept.

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 voluntary winding up of a company in the case of which no 'Declaration of solvency' is required, is called ___________.

  1. Member's voluntary winding up

  2. Creditors voluntary winding up

  3. Winding up by court

  4. Voluntary winding up
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 beacause the company first only becomes unable to pay the liabilities.