Arrange the following in correct sequence in the event of dissolution of a partnership firm.1. If surplus, it is distributed among the partners.2. The assets of the firm are realised.3. Amount realised is applied towards repayment of liabilities to outsiders and loan taken from partners.4. Capital contributed by partners is repaid.Select the correct answer:

Arrange the following in correct sequence in the event of dissolution of a partnership firm. 1. If surplus, it is distributed among the partners. 2. The assets of the firm are realised. 3. Amount realised is applied towards repayment of liabilities to outsiders and loan taken from partners. 4. Capital contributed by partners is repaid. Select the correct answer:

The assets of the Partnership firm, including any sums contributed by the partners to makeup deficiencies of capital at the time of dissolution, shall be applied in the following manner and order: (A) In paying each partner rateably what is due to him for advances as distinguished from capital. (B) In paying to each partner rateably what is due to him on account of capital. (C) In paying the debts of the firm to third parties (D) Dividing among the partners in the proportion in which they were entitled to share profits. Choose the correct answer from the options given below:

A

(C), (A), (B), (D)

B

(C), (B), (A), (D)

C

(A), (B), (C), (D)

D

(B), (C), (A), (D)

Arrange the following steps of 'adjustment of old partners' capital on the basis of incoming partner's capital in a correct order.
1. Ascertain the present capital of the old partners.
2. Calculation of total capital of firm on the basis of new partner's capital.
3. Finding the surplus/deficit capital.
4. Determining the new capital of each partner.
Select the correct answer:

A

2, 4, 1, 3

B

3, 2, 1, 4

C

4, 3, 2, 1

D

1, 4, 2, 3

A', 'B' and 'C' are partners in a partnership firm named A, B & C. 'A' retires from the firm without giving any public notice. Thereafter, an existing creditor lends Rs. ten lakh to the firm on the basis of his knowledge that 'A', 'B' and 'C' are the three partners in the firm. This amount remains unpaid by the firm. The creditor wants to recover the unpaid loan amount from the firm.

A

No one will be liable for the unpaid loan amount

B

A', 'B' and 'C' will be liable for the unpaid loan amount

C

Only 'B' and 'C' will be liable for the unpaid loan amount

D

Only 'A' will be liable for the unpaid loan amount

Upon dissolution, which is the proper order for application of the firm's assets?
1. Payment of partner's loan.
2. In paying, the debts of the firm to third partiy.
3. Distribution of surplus to partners in profit sharing ratio.
4. Payment of partners capital.
Select the correct answer:

A

1, 4, 3 and 2

B

2, 1, 4 and 3

C

2, 1, 3 and 4

D

1, 2, 3 and 4

Which of the following rules stands true while preparing a schedule of changes in working capital? (A) An increase in current assets increases working capital (B) An increase in current assets decreases working capital (C) An increase in current liabilities decreases working capital (D) An increase in current liabilities increases working capital Choose the most appropriate answer from the options given below:

A

A and C only

B

A and D only

C

B and D only

D

A, B and C only

Arrange the following steps of adjustment of capital (reconstitution of firm) incorrect order.
1. Calculation of total capital of new firm.
2. Finding out the surplus/deficiency in each of partner's capital account.
3. Calculation of adjusted old capitals of partners.
4. Finding out the new capitals of partners.
Select the correct answer:

A

3, 4, 2, 1

B

4, 3, 2, 1

C

3, 1, 4, 2

D

3, 2, 4, 1

Which one of the following combination of rules stands true while preparing schedule of changes in working capital?
1. An increase in current assets increases working capital.
2. An increase in current assets decreases working capital.
3. An increase in current liabilities decreases working capital.
4. An increase in current liabilities increases working capital.

A

Both 1 and 4

B

Both 1 and 3

C

Both 2 and 3

D

Both 3 and 4

Consider the following parties and arrange them in the correct sequence in the event of dissolution of a firm
i. Secured creditors
ii. Unsecured creditors
iii. Partners who have granted loans
iv. Partners who have contributed over and above profit-sharing ratio

A

ii, i, iii, iv

B

i, ii, iii, iv

C

i, ii, iv, iii

D

ii, i, iv, iii

X' and 'Y' jointly take a loan, from 'Z' with promise to repay the loan amount with interest within two years. Soon after taking the loan 'X' is declared as an insolvent and remains insolvent till the date of repayment of loan. 'Y' also fails to repay the loan. 'X' on account of his status as insolvent enjoys immunity from legal proceedings. In these circumstances:

A

Z' can in law institute a suit for recovery of, only 50% of the outstanding from 'Y'

B

Z' is entitled in law to sue 'Y' alone for recovery of the entire outstanding amount

C

Z' is not entitled to sue 'Y' also for recovery of loan amount till the order of insolvency of 'X' ceases to operate

D

Z' is entitled in law to sue 'Y' for 50% of the principal amount due and the entire interest outstanding

Arrange the following parties in the event of dissolution of a firm.
1. Secured creditors
2. Unsecured creditors
3. Partners who have granted loans
4. Partners who have contributed over and above profit sharing ratio
Select the correct answer:

A

2, 1, 3, 4

B

1, 2, 3, 4

C

1, 2, 4, 3

D

2, 1, 4, 3

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