Match the following list 1 with list 2.

Choose the correct answer from the options given below.

A-III, B-II, C-IV, D-I

The correct answer is option 3- A-III, B-II, C-IV, D-I.

* Debts owed by the firm to outsiders- Firm Debts are the liabilities and financial obligations incurred by the partnership firm itself. These debts arise from the normal course of business operations and are related to the activities of the partnership. Firm debts may include business loans, trade payables, lease obligations, and any other debts or obligations that the partnership firm owes to external parties.

* Debts owed by partner in his personal capacity to another person- Private debts refer to the personal liabilities and financial obligations of individual partners in a partnership. These debts are not directly related to the partnership business but are instead incurred by the partners in their personal capacity. Private debts may include personal loans, credit card debts, mortgages, medical bills, or any other financial obligations that a partner may have outside the context of the partnership.
For example, if a partner took out a personal loan to finance a house or a car, that loan would be considered a private debt because it is not associated with the partnership's business activities.

* Economic relationship among partner comes to end- Dissolution of Partnership Firm refers to the complete closure and winding up of the partnership business itself. It occurs when the partners decide to cease all business operations and liquidate the assets and liabilities of the firm. During the dissolution of a partnership firm, the assets are sold, the debts are paid off, and any remaining funds are distributed among the partners according to their agreed-upon profit-sharing ratio or as per legal requirements. Once all the affairs of the partnership firm are settled, it ceases to exist as a legal entity. All the economic relationship among partners end.

* Assets are revalued and liabilities are reassessed- Dissolution of partnership refers to the termination of the partnership agreement or relationship between the partners. When a partnership is dissolved, it means that the existing partnership agreement is no longer valid, and the legal relationship between the partners comes to change. The business entity itself may continue to exist if the remaining partners choose to do so, but with a different partnership agreement or by adding new partners. Revaluation account is made to assess the change in value of assets and liabilities at the time of dissolution of partnership or reconstitution of partnership firm.