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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

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 suit of a partner, the court may order a partnership firm to be dissolved when a partner becomes ________.

  1. Insolvent

  2. Adjudicated

  3. Insane

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

Dissolution of a partnership firm may take place without the intervention of court or by the order of a court, in any of the specified ways. It may be noted that dissolution of the firm necessarily brings in dissolution of the partnership. Dissolution of Court is one of the way which results in dissolution of a firm. At the suit of a partner, the court may order a partnership firm to be dissolved on any of the following grounds:

(a) when a partner becomes insane; 
(b) when a partner becomes permanently incapable of performing his duties as a partner; 
(c) when a partner is guilty of misconduct which is likely to adversely affect the business of the firm;
(d) when a partner persistently commits breach of partnership agreement;
(e) when a partner has transferred the whole of his interest in the firm to a a third party; 
(f) when the business of the firm cannot be carried on except at a loss; or 
(g) when, on any ground, the court regards dissolution to be just and equitable.

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 partnership changes the existing relationship between _______ but the firm may continue its business as before.

  1. Directors

  2. Partners

  3. Shareholders

  4. Employees
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to section 39 of the partnership act 1932, the dissolution of partnership between all the partners of a firm is called the dissolution of the firm. The act recognizes the difference in the breaking of relationship between all the partners of a firm and between some of the partners; and it is the breaking or discontinuance of relationship between all the partners which is termed as the dissolution of partnership firm. 

The 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

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 partnership firm may take place by ______.

  1. Admission of a new partner

  2. Change in existing profit-sharing ratio among partners

  3. Dissolution of agreement

  4. Retirement of a partner
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Dissolution of a partnership firm may take place without the intervention of court or by the order of a court, in any of the ways specified. It may be noted that dissolution of the firm necessarily brings in dissolution of the partnership. Dissolution by agreement is one of the way a firm can be dissolved, A firm is dissolved:

a. With the consent of all the partners or 
b. In accordance with a contract between the partners.

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 the firm necessarily brings in dissolution of the ________.

  1. Company

  2. Partnership

  3. Society

  4. LLP
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Dissolution of a partnership firm may take place without the intervention of court or by the order of a court, in any of the ways specified. It may be noted that dissolution of the firm necessarily brings in dissolution of the partnership. Dissolution of firm may take place in any of the following ways:

1. Dissolution by agreement
2. Compulsory disclosure
3 On the happening of certain contingencies
4. Dissolution by notice
5. Dissolution by court

Multiple choice book keeping and accountancy dissolution of firm difference between realisation account and revaluation account payment of firm's debts and separate debts, realisation of assets and liabilities meaning of dissolution of partnership firm

Is rent paid to a partner appropriation of profits ?

  1. It is appropriation of profit

  2. It is not appropriation of profit

  3. If partner's contribution as capital is maximum

  4. If partner is working partner.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Rent is paid for the use of asset of partner in business. Rent paid is an expense for business not as distribution of profit to partners. It is charged to profit and loss account not from profit and loss appropriation account. Rent paid to a partner is charged to profit not appropriation of profit.