Dissolution of Partnership Firm Means:

(A) Assets are sold and liabilities are paid off
(B) The business of the firm is closed
(C) The books of account are closed
(D) Economic relationship between the partners continues
(E) Assets are revalued and liabilities and reassessed

Choose the correct answer from the options given below:

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

The dissolution of a firm signifies the termination of the business entity as a whole, while the dissolution of a partnership indicates the ending of the existing partnership relationship between the partners. Dissolution of partnership means the reconstitution of the partnership firm by the way of admission of a new partner, retirement or death of a partner, etc.  Dissolution of the firm makes the firm to end the partnership and the business comes to end. The economic relationship in dissolution of partnership firm ends. Assets are sold and liabilities are paid off.