Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

In which of the following the Economic relationship between the partners comes to an end?

Options:

Dissolution of partnership

Dissolution of partnership firm

Retirement of a partner

Death of a partner

Correct Answer:

Dissolution of partnership firm

Explanation:

The correct answer is option 2- Dissolution of partnership firm.

In Dissolution of partnership firm, the Economic relationship between the partners comes to an end.

Dissolution of partnership refers to a change in the relationship between partners due to events like admission, retirement, or death of a partner. The business may still continue whereas Dissolution of partnership firm means complete termination of the business and economic relationship between all partners. The firm ceases to exist.

Retirement of a partner leads to dissolution of the partnership (not the firm), and the remaining partners may continue the business.

Death of a partner also leads to dissolution of the partnership, but not necessarily the firm, if there's an agreement to continue.