Which of the following is/are fact(s) about dissolution of the partnership firm?

(A) The business of the firm is closed.
(B) Assets are sold and liabilities are paid off.
(C) A firm can be dissolved by the court's order.
(D) The books of account are closed.
(E) Economic relationship between the partners continues though in a changed form.

Choose the correct answer from the options given below.

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

The correct answer is Option 1- (A), (B), (C) and (D) only.

In case of dissolution of a firm, the firm ceases to conduct business and has to settle its accounts. For this purpose, it disposes off all its assets for satisfying all the claims against it.
The correct facts about the dissolution of a partnership firm are:

• (A) The business of the firm is closed.
• (B) Assets are sold, and liabilities are paid off.
• (C) A firm can be dissolved by the court's order.
• (D) The books of account are closed.

Economic relationships are end in case of dissolution of firm whereas it is changed in case of dissolution of partnership.