Practicing Success
Loss on the event of dissolution of a firm including deficiencies of capital shall be paid from which source first? |
Bank Borrowings Profits Partner's Capital A/c By partner's individually in their profit sharing ratio, |
Profits |
The correct answer is option (2) : Profits When a firm is dissolved, its business operations come to an end, and it must settle all its accounts and liabilities. Section 48 of the Partnership Act 1932 provides the following rules, which, subject to any agreement among the partners, apply in this context: |