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Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

Assertion: On retirement, the old partnership agreement comes to an end and a new partnership agreement comes into existence between the remaining partners.

Reasoning: Retirement of the partnership leads to the reconstitution of the firm.

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:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

Explanation:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A as retirement makes the reconstitution of the firm not dissolution. A new agreement comes into force.

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