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Home Questions WKC3E2432S
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Partnership comes into existence as a result of an agreement among the partners.
Reasoning: The Partnership Act lays that the agreement must be in writing.

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:

Partnership comes into existence as a result of agreement among the partners. The agreement can be either oral or written. The Partnership Act does not require that the agreement must be in writing. But wherever it is in writing, the document, which contains terms of the agreement is called ‘Partnership Deed’.

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