Dissolution of Partnership Test

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Dissolution of Partnership Test - 15

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Weekly Quiz Competition

Question 1
1 / -0

Upon dissolution of firms, the surplus left after settlement of debts and liabilities of the firms shall be ____.

A
Credited to the Reserve Account

B
Credited to Government of India A/c

C
Distributed among the partners equally

D
Distributed to partners according to their rights
Question 2
1 / -0

Upon dissolution, the firm's assets shall be first applied in paying the debts of the firm to third parties, thereafter it shall be applied in payment of partners' loan, then it shall be applied in payment of partners' capital and if still surplus remains, it should used for___.

A
In paying the debts of the firm to third parties

B
Payment of partners' loan

C
Payment of partners' capital

D
Distribution of surplus to partners in profit sharing ratio
Question 3
1 / -0

Upon dissolution, the firm's assets shall be first applied in__.

A
In paying the debts of the firm to third parties

B
Payment of partners loan

C
Payment of partners capital

D
Distribution of surplus to partners in profit sharing ratio
Question 4
1 / -0

In which of the following situations, the firm will NOT be compulsorily dissolved?

A
All partners or any one of the partners is declared insolvent.

B
The business of the firm becomes unlawful.

C
The partnership has various adventures & one such adventure becomes illegal.

D
The decision is taken by all the partners to dissolve the firm.
Question 5
1 / -0

In settling the accounts of a firm after dissolution, losses, including deficiencies of capital, shall be paid -.

A
Out of profits

B
Out of capital

C
By the partners individually in the proportions in which they were entitled to share profits

D
First out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits
Question 6
1 / -0

Upon dissolution, the firm's assets shall be first applied in paying the debts of the firm to third parties, thereafter it shall be applied in payment of partners' loan, the it shall be applied in___.

A
In paying the debts of the firm to third parties

B
Payment of partners loan

C
Payment of partners capital

D
Distribution of surplus to partners in profit sharing ratio
Question 7
1 / -0

When it is not registered, a partnership firm is ___________.

A
demend to be illegal organizaation & disallowed to carry on business

B
allowed to carry on business subject to payment of penalty

C
allowed to carry on business subject to certain disabilities

D
all of the above
Question 8
1 / -0

In which of the following cases, the Court may because of the partner, dissolve a firm?

A
Partner willfully and persistently commits breach of partnership agreement as management.

B
Partner conducts himself in such a way that it is not reasonably practicable for the other partners to carry on business in partnership with him.

C
The firm has been continuously suffering losses and in future also the business cannot be carried on except at a loss.

D
All of the above
Question 9
1 / -0

It is uncommon to find for realization account :

A
Prepared at the time of dissolution of firm.

B
Contains generally all assets and liabilities.

C
Records the sale of various assets and payment of liabilities.

D
None of the above.

Solution

Dissolution of a partnership firm means that the firm closes down its business and comes to an end. A realization account is opened. In this, all the assets and liabilities are transferred. It records the sale of assets and payment of liabilities because the main object of this account is to calculate the profit or loss on sale of such assets and payment of liabilities.
Question 10
1 / -0

Garner Vs Murray requires _________.

A
that all partners should bring in cash equal to their respective shares of the loss on realization

B
that all partners should bring in cash equal to their respective shares of the loss on realization and deficiency of insolvent partner should be borne by solvent partners in their profit sharing ratio

C
that all partners including insolvent partner should bring in cash equal to their respective shares of the loss on realization and deficiency of insolvent partner should be borne by solvent partners in their last agreed capital ratio

D
that the solvent partners capital loss should be borne in the ratio of their capitals standing in the balance sheet on the date of dissolution of the firm

Solution

According to the Garner Vs Murray rule the loss on the account on the insolvency of a partner is a capital loss which should be borne by the solvent partners in the ratio of their capitals standing in the balance sheet on the date of dissolution of the firm.

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Dissolution of Partnership Test - 15

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Dissolution of Partnership Test - 15

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SHARING IS CARING

Question 1

Credited to the Reserve Account

Credited to Government of India A/c

Distributed among the partners equally

Distributed to partners according to their rights

Question 2

In paying the debts of the firm to third parties

Payment of partners' loan

Payment of partners' capital

Distribution of surplus to partners in profit sharing ratio

Question 3

In paying the debts of the firm to third parties

Payment of partners loan

Payment of partners capital

Distribution of surplus to partners in profit sharing ratio

Question 4

All partners or any one of the partners is declared insolvent.

The business of the firm becomes unlawful.

The partnership has various adventures & one such adventure becomes illegal.

The decision is taken by all the partners to dissolve the firm.

Question 5

Out of profits

Out of capital

By the partners individually in the proportions in which they were entitled to share profits

First out of profits, next out of capital, and lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits

Question 6

In paying the debts of the firm to third parties

Payment of partners loan

Payment of partners capital

Distribution of surplus to partners in profit sharing ratio

Question 7

demend to be illegal organizaation & disallowed to carry on business

allowed to carry on business subject to payment of penalty

allowed to carry on business subject to certain disabilities

all of the above

Question 8

Partner willfully and persistently commits breach of partnership agreement as management.

Partner conducts himself in such a way that it is not reasonably practicable for the other partners to carry on business in partnership with him.

The firm has been continuously suffering losses and in future also the business cannot be carried on except at a loss.

All of the above

Question 9

Prepared at the time of dissolution of firm.

Contains generally all assets and liabilities.

Records the sale of various assets and payment of liabilities.

None of the above.

Solution

Question 10

that all partners should bring in cash equal to their respective shares of the loss on realization

that all partners should bring in cash equal to their respective shares of the loss on realization and deficiency of insolvent partner should be borne by solvent partners in their profit sharing ratio

that all partners including insolvent partner should bring in cash equal to their respective shares of the loss on realization and deficiency of insolvent partner should be borne by solvent partners in their last agreed capital ratio

that the solvent partners capital loss should be borne in the ratio of their capitals standing in the balance sheet on the date of dissolution of the firm

Solution

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