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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Dissolution of Partnership Firm

Question:

Which combination of statements is true about dissolution-

(A) Dissolution of a partnership is different from dissolution of a firm.
(B) A partnership is dissolved when there is a death of a partner.
(C) A firm is dissolved when all partners give consent to it.
(D) A firm is compulsorily dissolved when a partner decides to retire.

Choose the correct answer from the options given below:

Options:

(A), (B) and (D) only

(A), (B) and (C) only

(B), (C) and (D) only

(A), (C) and (D) only

Correct Answer:

(A), (B) and (C) only

Explanation:

The correct answer is Option (2) → (A), (B) and (C) only

StatementTrue / FalseExplanation
(A) Dissolution of a partnership is different from dissolution of a firm. True Dissolution of partnership means a change in the relationship among partners (e.g., retirement, admission, death), but the firm continues. Dissolution of a firm means the closure of business and end of the partnership itself.
(B) A partnership is dissolved when there is a death of a partner. True Death of a partner ends the existing partnership (reconstitution occurs if the firm continues).
(C) A firm is dissolved when all partners give consent to it.  True As per the Indian Partnership Act, 1932 — a firm may be dissolved by mutual consent of all partners.
(D) A firm is compulsorily dissolved when a partner decides to retire.  False Retirement does not dissolve the firm; it only changes the constitution (reconstitution).

 

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