Given: I. Settlement of debts II. Cessation of business III. Introduction of assets IV. Disposal of assets Which of these constitutes dissolution of…

JAMB Accounting 2023 53 views

Given:

I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets

Which of these constitutes dissolution of partnership?

  1. II and IV only
  2. I, II and IV only ✓
  3. I, II and III only
  4. II and III and IV only

Explanation

Dissolution means ending the partnership. This involves stopping business operations, selling off assets to raise cash, and paying all debts owed. These are the key steps in closing down.

Introducing assets happens when starting or expanding a partnership, not ending it. During dissolution, assets go out (sold), not in.

Key steps: Close business → Sell assets → Pay debts → Distribute remaining money to partners.

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