Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

Which of the following is not a case of dissolution of a partnership firm by agreement?

Options:

By the adjudication of a partner as an insolvent.

In accordance with a contract between the partners.

With the consent of all the partners.

Both options 2 and 3

Correct Answer:

By the adjudication of a partner as an insolvent.

Explanation:

Dissolution by Agreement refers to the circumstances under which a firm can be dissolved. It can occur in the following ways:
(a) When all the partners provide their consent, the firm can be dissolved. This means that all partners agree to terminate the partnership and cease its operations.
(b) Dissolution can also take place in accordance with a contract that has been established between the partners. The partnership agreement, which outlines the terms and conditions of the partnership, may include provisions for the dissolution of the firm.