alleryStart learning →A premium was paid for a fixed term but the firm dissolves early. What follows?
AA fair part is repaid
BThe premium is forfeited
CIt goes to creditors
DThe premium is doubled
Answer & Solution
Correct answer: A. A fair part is repaid
Premature dissolution, other than by death, entitles the partner to repayment of a reasonable part of the premium.
Keep practising Dissolution of a Firm
Browse all Dissolution of a Firm questions for CA Foundation, or explore more Accounting topics.
Related questions
A partner rescinds a partnership for fraud. What does he hold over the surplus assets?Until winding up is complete, a partner may restrain use of what for personal gain?Subject to contract, the adjudication of one partner as insolvent does what?A firm runs several adventures and one becomes illegal. What of the lawful ones?What does an event making the firm's business unlawful do to the firm?A loss of 30,000 arises and the firm has a profit reserve of 10,000. How much falls on capCash from sale is 90,000 and outside liabilities are 30,000. How much reaches partners?Capitals are A 50,000, B 30,000, sharing equally. After a loss of 20,000, what is A's capi