Understanding the Dissolution of Partnership Firm
The term 'Dissolution of Partnership Firm' refers to the termination of the legal relationship between all the partners of a business. This effectively ends the business operations, except for activities related to the winding up of the firm. The assets of the business are sold off to settle the firm's financial affairs.
Interestingly, even after the dissolution of the existing partnership, the business may continue under the same name, if the partners so decide. In essence, while it results in the dissolution of the partnership, it doesn't necessarily mean the end of the business. As per Section 39 of the Partnership Act 1932, when all the partners of a firm dissolve their partnership, it's referred to as the dissolution of the firm.
Let's delve deeper into the various aspects of Dissolution of Partnership Firm:
- Understanding Dissolution of Partnership
- What is Dissolution of a Firm?
- Differences between Dissolution of Partnership and Dissolution of Firm
- How to Settle Accounts
- Accounting Treatment during Dissolution
The above discussion provides a detailed explanation of the Dissolution of Partnership Firm for Class 12 Commerce students. Stay tuned for more insights.
| Multiple Choice Questions |
| Q.1- What happens to the firm's business under dissolution of the partnership? |
|
a. Continues
b. Discontinues c. Gets affected d. Ceases |
| Q.2- Dissolution of firm necessarily implies dissolution of : |
|
a. Admission
b. Retirement c. Death d. Partnership |
| Q.3- In which ratio is any available surplus distributed among the partners? |
|
a. Gaining ratio
b. Sacrificing ratio c. Profit sharing ratio d. Old ratio |
| Q.4- Which account is settled last in the event of dissolution of a firm? |
|
a. Partner’s Capital Accounts
b. Cash Account c. Partner’s Loan Account d. Realisation Account |
| Answer Key |
| 1-a, 2-d, 3-c, 4-b |
More Articles for UGC NET Commerce Notes
- Ledger and Trial Balance
- Disposal of Amount Due to Retiring Partner
- Dissolution of a Firm
- Distribution of Profit Among Partners
- Converting Economic Factors into Business Opportunities
- Dual Aspect Concept in Accounting with Examples
- Elasticity and Expenditure
- Dissolution of Partnership Firm
- Economic Environment in India - Liberalisation, Privatisation, Globalisation
- Emergence of Macroeconomics
UGC NET/SET Course Online by SuperTeachers: Complete Study Material, Live Classes & More
Get UGC NET/SET - Till Dec'2025 Exam SuperCoaching @ just