Question : In the event of dissolution of a firm, the partner’s personal assets are first applied for payment of:
Option 1: The personal liabilities
Option 2: The firm’s liabilities
Option 3: Both the personal & firm’s liabilities
Option 4: The preferential & tax liabilities
Correct Answer: The personal liabilities
Solution : A firm's operations come to an end in a condition known as a dissolution. Eventually, the liabilities are paid off and the assets are sold.
Sec. 49 of the Indian Partnership Act, 1932 states that a partner's private assets must be utilised to pay off their personal debt before any excess, if any, can be used for the firm's liabilities.
Hence the correct answer is option 1.
Question : On dissolution of the firm, what payment is made first from the personal assets of a partner?
Option 1: Firm debts
Option 2: Private debts
Option 3: The firm's debt and private debt both
Option 4: None of the above
Question : On dissolution of a firm, out of the proceeds received from the sale of assets will be paid first of all to :
Option 1: Partner’s Capital
Option 2: Partner’s additional capital
Option 3: Outside Creditors
Option 4: Partner’s Loan to Firm
Question : On dissolution of a firm; out of the proceeds received from the sale of assets ________will be paid first of all.
Option 1: partner's capital
Option 2: partner's loan to firm
Option 3: outsider's liabilities
Option 4: partner's additional capital
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