At the time of firm's dissolution, the bank balance was Rs 80,000, after paying off all the other liabilities except the followings-
Shikha' s Loan to the firm- 60,000
Shikha 's Capital - 50,000
Diksha's Capital - 50,000.
Diksha asked to pay her capital first.
To whom, the firm will pay first?
Answer & explanation
Correct answer: option 3
According to Partnership Act 1932 the expenses will be paid off in the following order at the time of dissolution-
1) Outsider's Liabilities
2) Partner's Loan
3) Partner's Capital Loan