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Home Questions TTQQDQDAGJ
Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Admission of a partner leads to the dissolution of the old firm and bringing the new firm into existence.
Reasoning: As a result of admission of a partner, old partners along with the new partner constitute the new firm. Thus, old firms are dissolved and new firm comes into existence.

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.

Both Assertion (A) and Reasoning (R) are incorrect.

Correct Answer:

Both Assertion (A) and Reasoning (R) are incorrect.

Explanation:

As a result of admission, only partnership agreement is dissolved not the firm. The firm is merely reconstituted as a result of admission of a partner.

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