Definitions [1]
Definition: Dissolution of Partnership Firm
- Indian Partnership Act 1932, Sec. 39, provides that, "The dissolution of the partnership between all the partners of a firm is called the dissolution of a firm."
- "The act of process of ending an official organization or legal agreement."
- "The dissolution of partnership firm indicates the discontinuance function as a firm."
Key Points
Key Points: Dissolution of Partnership Firm
- Dissolution of a partnership firm means a change in the agreement; the business may continue. Dissolution of a firm means complete closure of business (Sec. 39).
- After the firm's dissolution, assets are sold, liabilities are paid, and the remaining balance is shared among partners.
- Modes of dissolution: Without Court Order and By Court Order.
- Without Court: Occurs by mutual agreement, partner insolvency, unlawful business, expiry of term, completion of venture, or notice if the partnership is at will.
- By Court: Happens if a partner is of unsound mind, permanently disabled, guilty of misconduct, breaches the agreement, the firm runs at a loss, or if the court finds it just and fair.
Important Questions [39]
- Dissolution expenses are credited to ______.
- State whether the following statement is True or False with reason. The debit balance of insolvent partner’s Capital Account is known as a capital deficiency.
- Mr. Aaba and Mr. Baba Are Equal Partners Whose Balance Sheet as on 31 St March, 2012 Was as Under
- An Account Opened to Find Out the Profit Or Loss on Sale of Assets and Settlement of Liabilities.
- If an asset is taken over by partner from firm his capital account will be ___________.
- A, B, and C were partners sharing profits and losses in the proportion of 2:2:1. Following is their balance sheet as on 31st March, 2013.
- Expenses incurred on a dissolution of a partnership firm.
- Assets and liabilities are transferred to Realisation Account at their ______ value.
- Devendra and Ganesh Were Partners Sharing Profits and Losses in the Ratio of 3: 2. They Dissolved the Partnership Firm on 31st March 2013 When Their Position Was as Follows: Pass Necessary Journal Entries in the Books of the Firm.
- On Dissolution, the Cash Or Bank Account is Closed Automatically.
- Uday and Prabhakar are partners sharing profits and losses in the proportion of 3/5 and 2/5 respectively.
- Give the word/term/phrase which can substitute the following statement. Assets which are not recorded in the books of account.
- If any unrecorded liability is paid on dissolution of the firm ___________ is debited.
- Ashwin, Bhavin and Pravin Carried on Business. They Share Profits an Losses in the Ratio of 5 : 3 : 2 Respectively. Their Balance Sheet as on 31st March, 2016 Was as Under :
- Aniket Ltd Issued 40,000 Equity Shares of 100 Each Payable as Follows : on Application Rs 20 on Allotment Rs 30 on First Call Rs 30 on Second Call Rs 20
- Answer in one sentence only. What is a capital deficiency?
- Give the word/term/phrase which can substitute the following statement. Winding up of partnership business.
- Akbar and Birbal Were Partners in a Firm Sharing Profits and Losses in the Ratio of 3 : 2 Respectively. Their Balance Sheet as on 31st March, 2013 Was as Follows :
- Answer in one sentence only. Who is called insolvent person?
- Answer in one sentence only. Who should bear the capital deficiency of an insolvent partner?
- Answer in one sentence only. Which account is debited on payment of dissolution expenses?
- Write the Word / Term / Phrase, Which Can Substitute the Following Statement. Expenses Incurred on Dissolution of a Partnership Firm.
- State whether the following statement is True or False. On dissolution Cash or Bank Account is closed automatically.
- State Whether the Following Statements is True Or False.
- State whether the following statement is True or False with reason. Dissolution takes place when the relation among the partners comes to an end.
- In case of dissolution assets and liabilities are transferred to ______ A/c.
- Ram, Laxman and Bharat Were Partners Sharing Profit and Losses in the Ratio of 2 : 2 : 1. Following is the Balance Sheet as on 31st March, 2016 : Balance Sheet as on 31st March, 2016
- State Whether the Following Statement is True Or False. at the Time of Disolution of a Partnership Firm All Assets Should Be Transfered to Realiasation Account.
- Following is the Balance Sheet as on 31 St March 2016 of M/S . Jay and Ajay :
- Manish and Co. Ltd. Made an Issue of 40000 Equity Shares of 20 Each Payable as Follows :
- State Whether the Following Statement is ‘True’ Or ‘False’ on Dissolution, Cash Or Bank Account is Closed Automatically.
- Rahul, Rohit and Ramesh Were Partners in a Firm Sharing Profits and Losses in the Ratio of 2:2:1 Respectively. the Balance Sheet as on 31.03.2013 Was as Follows
- Jay , Ajay and Vijay Were Partners Sharing Profits and Losses in the Proportion of 2 : 2 : 1 .
- Give the word/term/phrase which can substitute the following statement. Debit balance of Realisation account.
- Write the word/phrase/term/ which can substitute the following statement. Expenses incurred on dissolution of firm.
- Asha, Usha and Nisha are partners in the firm sharing profits and losses in the ratio of 3 : 2 : 1 respectively.
- Hema, Manisha and Limsy were in partnership firm sharing profits and losses in the ratio of 5:3:2. They decided to dissolve their partnership firm on 31st March 2019
- Do you agree or disagree with the following statement: On dissolution, cash/bank account is closed automatically.
- Lal, Bal and Pal were partners sharing profits and losses in the ratio of 2 : 2 : 1. The following is the Balance Sheet as on 31st March, 2020.
