Maharashtra State BoardHSC Commerce 12th Board Exam
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Select the Most Appropriate Alternative from Those Given Below : - Book Keeping and Accountancy

MCQ

Select the most appropriate alternative from those given below :

Partnership is compulsorily dissolved when the partners of the firm become ____________

Options

  • Solvent

  • Insolvent

  • Creditor

  • None of these

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Solution

Partnership is compulsorily dissolved when the partners of the firm become insolvent.

Explanation: When the partners of a firm become insolvent, it implies that the assets of the firm have decreased in comparison to the liabilities. Moreover, the partners do not have enough funds to make payment to the creditors; hence, the partnership is compulsorily dissolved as per the order of a court of justice.

Concept: Dissolution of Partnership Firm
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APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 6 Dissolution of Partnership Firm
Exercise | Q 6 | Page 182
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