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CA Foundation Dissolution of a Firm — practice questions

Explore 44 free Dissolution of a Firm questions in CA Foundation Accounting. Open each question or exercise to read its content, reference answers and available explanation.

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Dissolution of a Firm questions and exercises with answers

Showing questions 1–30 of 44.

What is meant by dissolution of a firm?Read the answer and worked solution →A firm may be dissolved by agreement with whose consent?Read the answer and worked solution →A firm is compulsorily dissolved if all partners but one are adjudged what?Read the answer and worked solution →A firm is formed for five years. What happens, subject to contract, when the term expires?Read the answer and worked solution →Subject to contract, what effect has the death of a partner on the firm?Read the answer and worked solution →How can one partner dissolve a partnership at will?Read the answer and worked solution →A notice ending a partnership at will names no date. When does dissolution occur?Read the answer and worked solution →Who may dissolve a firm on a partner's suit for a co-partner's unsound mind?Read the answer and worked solution →Which is a ground for the Court to dissolve a firm?Read the answer and worked solution →Apart from listed grounds, the Court may dissolve a firm if it is what?Read the answer and worked solution →After dissolution, partners remain liable to outsiders for firm acts until when?Read the answer and worked solution →On dissolution, every partner can insist firm property first pays what?Read the answer and worked solution →After dissolution, a partner's authority to bind the firm lasts how long?Read the answer and worked solution →Under the settlement rules, losses on dissolution are met first from what?Read the answer and worked solution →Losses not covered by profits are met next out of what?Read the answer and worked solution →If profits and capital fall short, how do partners bear the last loss?Read the answer and worked solution →What is the first claim on firm assets when accounts are settled?Read the answer and worked solution →Which partner due is paid before capital?Read the answer and worked solution →After outside debts and partner advances, what is paid next?Read the answer and worked solution →Any residue left after repaying capital is divided in what manner?Read the answer and worked solution →Firm debts and a partner's separate debts exist. Firm property goes first to which?Read the answer and worked solution →A partner's separate property is applied first to which debts?Read the answer and worked solution →A premium was paid for a fixed term but the firm dissolves early. What follows?Read the answer and worked solution →If a partnership is rescinded for fraud, the innocent partner may rank as what?Read the answer and worked solution →How is goodwill treated when accounts are settled after dissolution?Read the answer and worked solution →A partner who sold his goodwill share competes later. What may he NOT do without agreement?Read the answer and worked solution →A restraint-of-trade agreement made on dissolution is valid only if restrictions are what?Read the answer and worked solution →Assets sell for 1,00,000. Creditors are 40,000 and a partner's loan is 20,000. How much is left for capital?Read the answer and worked solution →Assets fetch 70,000. Outsiders are owed 50,000, partner X's loan is 30,000. X's loan repaid?Read the answer and worked solution →Realisation loss is 12,000. A and B share profits 2:1. What is A's share of it?Read the answer and worked solution →

Worked practice questions

What is meant by dissolution of a firm?

  1. The profit ratio is revised
  2. Only one partner retires
  3. A new partner is admitted
  4. Partnership ends for all partners
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Correct answer: D. Partnership ends for all partners

Dissolution of the firm means the partnership between every partner comes to an end, unlike a change in the firm's constitution.

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A firm may be dissolved by agreement with whose consent?

  1. The majority of partners
  2. The managing partner alone
  3. All the partners together
  4. The senior-most partner
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Correct answer: C. All the partners together

Dissolution by agreement needs the consent of every partner, or must follow a contract among them.

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A firm is compulsorily dissolved if all partners but one are adjudged what?

  1. Of unsound mind
  2. Absent from India
  3. Guilty of fraud
  4. Declared insolvent
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Correct answer: D. Declared insolvent

Adjudication of all partners, or all but one, as insolvent compels dissolution of the firm.

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More Accounting topics

Final Accounts of Sole ProprietorsAccounting ConceptsBills of Exchange and Promissory NotesCompany AccountsDepreciation and AmortisationInventoriesPartnershipBank Reconciliation Statement