Tag: dissolution of partnership

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Questions Related to dissolution of partnership

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

Where a Partner's Capital Account has a debit balance and he is unable to bring in necessary cash to make up the deficiency, it is called ________.

  1. Loss on Dissolution of Firm

  2. Loss on Dissolution of Partnership

  3. Loss arising out of piecemeal distribution of assets

  4. Loss arising out of Partner's insolvency.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a partner's capital account shows a debit balance and they cannot contribute the necessary funds to cover it, the resulting loss is attributed to the insolvency of that partner.

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

On a dissolution of a firm the partners selling the goodwill of a firm cannot _____________.

  1. carry on a similar business

  2. compete with the business sold by the purchaser.

  3. represent themselves as carrying on old business.

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

Upon selling the goodwill of a firm, partners are restricted from representing themselves as carrying on the old business, as this would undermine the value of the goodwill sold to the purchaser.

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

The Loss arising out of Partners insolvency shall be borne by_________ according to Garner vs Murray case.

  1. all the Partners equally

  2. solvent Partners in Capital Ratio

  3. all the Partners in Profit and Loss Sharing Ratio

  4. none of the above.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

According to the rule in Garner vs Murray, the loss arising from a partner's insolvency is to be borne by the solvent partners in proportion to their capital contributions, not their profit-sharing ratio.

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

Persons who  have entered into partnership with one another are collectively called ____________.

  1. Firm

  2. Co-owner

  3. Firm name

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

By definition, persons who have entered into a partnership agreement with one another are collectively referred to as a 'Firm'.

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

Which of the following purpose is permissible in a partnership?

  1. Business purpose

  2. Social purpose

  3. Religious purpose

  4. Charitable purpose
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A partnership must be formed for the purpose of carrying on a business, which includes trade, occupation, or profession, to be legally recognized as a partnership.

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

In which of the following case the dissolution of partnership takes place even when there is no dissolution of the firm?

  1. By the retirement of a partner

  2. By the insolvency of a partner

  3. By the death of a partner

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

Dissolution of partnership refers to a change in the relation of partners, whereas dissolution of the firm refers to the end of the business entity. Retirement, insolvency, or death of a partner dissolves the partnership but not necessarily the firm.

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

N & Z are partners in a firm dealing in stationery. N placed order in the firm's name and on the firm's letter pad for $10$ bags of wheat to be supplied at his residence _______________.

  1. The firm is not liable for N's act

  2. The firm is liable for N's act

  3. A has acted within his implied authority

  4. A has acted within his implied authority and hence firm is liable to pay
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A partner's implied authority is limited to acts done in the ordinary course of the firm's business. Ordering wheat for personal use is outside the scope of a stationery business and thus not binding on the firm.

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

In which of the following case the dissolution of partnership takes place even when there is no dissolution of the firm?

  1. By the expiry of the fixed term for which the partnership was formed

  2. By the completion of the adventure

  3. By the death of a partner

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

Dissolution of partnership occurs when the existing agreement is altered. Death of a partner, expiry of a term, or completion of an adventure all trigger a change in the partnership relation without necessarily ending the firm's business.

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

Who can give Public Notice of retirement of partner?

  1. All the partners of the reconstituted firm

  2. By the retiring partner or nay partner of the reconstituted firm

  3. Any partner of the reconstituted firm

  4. Retiring partner only
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

A public notice of retirement can be given by the retiring partner themselves or by any of the continuing partners of the reconstituted firm to inform third parties.