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Home Questions Q66QEZJPPE
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

Assertion: A firm can have a minimum of 2 with a maximum of 50 partners.

Reasoning: The limit of two partners flows from the definition in the Partnership Act, 1932. The maximum limit of partners is also prescribed in the Partnership Act, 1932.

Options:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

Assertion (A) is true but Reasoning (R) is not correct.

Assertion (A) is not true but Reasoning (R) is correct.

Correct Answer:

Assertion (A) is true but Reasoning (R) is not correct.

Explanation:

The correct answer is Option 3- Assertion (A) is true but Reasoning (R) is not correct.

Assertion: A firm can have a minimum of 2 with a maximum of 50 partners. It is true.

Reasoning: The maximum limit of partners is also prescribed in the Partnership Act, 1932. It is Incorrect. While the minimum requirement of 2 comes from the Partnership Act, the maximum limit of 50 is not directly prescribed in the Partnership Act, 1932, but rather in Companies Act, 2013. It is determined by the Companies Act 2013 (section 464), which allows up to 100 as the maximum no of partners in partnership firms. The Central Government has prescribed (according to Rule 10 of Companies (Miscellaneous) Rules, 2014) that the maximum no of partners in partnership firms should not exceed 50.

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