Match the following with regard to partnershipList IList IIA. When a…

Match the following with regard to partnership

List I	List II
A. When a new partner joins the partnership	I. Compulsory dissolution
B. When an existing partner leaves the partnership	II. Admission of a partner
C. When the business of firm becomes illegal	III. Prepared in the case of death of a partner
D. Executor's Account	IV. Retirement of a Partner

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-II, B-IV, C-I, D-III

(A) When a new partner joins the partnership — this matches (II) Admission of a partner. A new partner joining reconstitutes the firm by admission.

(B) When an existing partner leaves the partnership — this matches (IV) Retirement of a Partner. A partner leaving while the others carry on is a retirement.

(C) When the business of firm becomes illegal — this matches (I) Compulsory dissolution. A firm whose business becomes illegal is dissolved compulsorily by law.

(D) Executor's Account — this matches (III) Prepared in the case of death of a partner. On a partner's death, the amount due to him is transferred to his executors' account and paid to them.

NCERT (2026-27 edition):
Modes of Reconstitution of a Partnership Firm – “Reconstitution of a partnership firm usually takes place in any of the following ways: Admission of a new partner: A new partner may be admitted when the firm needs additional capital or managerial help. According to the provisions of Partnership Act 1932 unless it is otherwise provided in the partnership deed a new partner can be admitted only when the existing partners unanimously agree for it.”

NCERT (2026-27 edition):
Modes of Reconstitution of a Partnership Firm – “… Retirement of an existing partner: It means withdrawal by a partner from the business of the firm which may be due to his bad health, old age or change in business interests.”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 2. Compulsory Dissolution: A firm is dissolved compulsorily in the following cases: (a) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract; (b) when the business of the firm becomes illegal; or …”

NCERT (2026-27 edition):
Disposal of Amount Due to Retiring Partner – “… It may noted that the accounting treatment for disposal of amount due to retiring partner and deceased partner is similar with a difference that in case of death of a partner, the amount credited to him/her is transferred to his Executors’ Account and the payment has to be made to him/her. This shall be taken up later in this chapter.”