Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

Which of the following facts are related to modes of reconstitution of a partnership firm?

(A) Admission of a new partner

(B) Dissolution of a partnership firm

(C) Death of a partner

(D) Change in the profit sharing ratio among the existing partners

(E) Retirement of a partner

Choose the correct answer from the options given below :

Options:

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

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

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

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

Correct Answer:

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

Explanation:

The correct answer is option (2) : (A), (C), (D) and (E) only

Reconstitution of the partnership firm takes place in the following ways-
* Admission of a new partner
* Change in profit sharing ratio
* Retirement of a partner
* Death of a partner

These modes represent changes in the composition of the partnership. Dissolution of a partnership firm is not a mode of reconstitution but rather the terminator of the partnership, so it is not related to reconstitution. So, the correct answer is (A), (C), (D) and (E) only