Arrange the following in correct sequence for application of assets in the Settlement of Accounts in Case Of Dissolution of a Partnership firm -
(A) The balance should be applied to repay loans made by the partners to the firm.
(B) The assets of the firm should be used in paying the debts of the firm to third parties.
(C) The balance assets may be used for paying partners proportionately on account of capital.
(D) The asset's residue, if any, shall be divided among the partners in their profit sharing ratio.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (B), (A), (C), (D)
Under Section 48 the assets of the firm, with any amount the partners bring in for a deficiency of capital, are applied in this order:
(B) debts of the firm to third parties;
(A) loans made by the partners to the firm;
(C) amounts due to partners on account of capital;
(D) the residue, divided in the profit sharing ratio.
NCERT (2026-27 edition): |