Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Dissolution of Partnership Firm

Question:

According to the section 48 of Partnership Act 1932, in case of dissolution of a firm, loss including the deficiencies of capital will be recovered first:

Options:

Out of capital

Out of profit

Out of revenue

Out of reserve

Correct Answer:

Out of profit

Explanation:

Losses, including deficiencies of capital, shall be paid :
(i) first out of profits
(ii) next out of capital of partners
iii) lastly, if necessary, by the partners individually in their profit sharing ratio