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Home Questions W4D9SNURYT
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 options given below.

Assertion (A):  A change in profit sharing ratio results in the dissolution of the partnership firm.
Reason (R): Existing agreement comes to an end and a new agreement comes into existence.

Options:

Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).

Both Assertion (A) and Reason (R) are true, and Reason (R) is not the correct explanation of Assertion (A).

Assertion (A) is true, but Reason (R) is False

Assertion (A) is False, but Reason (R) is True

Correct Answer:

Assertion (A) is False, but Reason (R) is True

Explanation:

The correct answer is option 4 - Assertion (A) is False, but Reason (R) is True.

Assertion (A):  A change in profit sharing ratio results in the dissolution of the partnership firm. This is false as change in profit sharing ratio results in the dissolution of the partnership only not the firm.

Reason (R): Existing agreement comes to an end and a new agreement comes into existence. This is true as there is change in partnership agreement which leads to the dissolution of partnership not dissolution of firm.

Thus, assertion is false and reason is true.

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