Question : Private property of each partner is applied first towards the payment of his _________and surplus, if any, is applied towards payment of_____________.
Option 1: Private debt, Firm's debts
Option 2: Firm's debt, Private debts
Option 3: Partner's final payments
Option 4: None of the above
Correct Answer: Private debt, Firm's debts
Solution : Answer = Private debt, Firm's debts
In a partnership, each partner's private property is first used to pay off their personal debts. Any surplus remaining is then applied towards paying off the firm's debts, ensuring that personal obligations are settled before addressing the partnership's liabilities. Hence, the correct option is 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
Question : Debts which the firm owes to outsiders are known as the firm's debts, whereas the debts which a partner owes in his personal capacity are known as___________.
Option 1: Firm's debt
Option 2: Private debt
Option 3: Capital
Question : Debt which the firm owes to outsiders are called
Option 1: Partner's debt
Option 2: Firm's debt
Option 3: Third party debt
Question : Firms property is applied for payment of__________
Option 1: Private debt
Option 4: None of these
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile