Tag: elements of business

Questions Related to elements of business

Upon dissolution, the firm's assets shall be first applied in paying the debts of the firm to third parties, shall thereafter he applied in __________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. In paying the debts of the firm to third parties

  2. Payment of partners loan

  3. Payment of partners capital

  4. Distribution of surplus to partners in profit sharing ratio

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Correct Option: B

Firm is automatically and compulsory dissolve, if _________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. All partners, or all but one partner, of firm are declared insolvent

  2. Some event happens which makes it unlawful for business of the firm to be carried on or for the partners to carry it on in partnership

  3. (A) or (B)

  4. None of the above

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Correct Option: C

Which of the following is prepared only at the time of dissolution of the firm?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Revaluation Account

  2. Realization Account

  3. Profit & Loss Adjustment Account

  4. All of the above

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Correct Option: B

In settling the accounts of a firm after dissolution, losses, including deficiencies of capital, shall be paid _________________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Out of profits

  2. Out of capital

  3. By the partners individually in the proportions in which they were entitled to share profits

  4. First out of profits, next out of capital, and, lastly, if necessary, by the partners individually in the proportions in which they were entitled to share profits

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Correct Option: D

Which of the following is/are disabilities of unregistered firm?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. No suit between partners and firm

  2. No suit by firm on a third party

  3. No claim of set-off

  4. All of the above

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Correct Option: D

In which of the following case there is no bar on the right of unregistered firm or any partner of its partner?

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. A suit for the dissolution of a firm

  2. A suit for rendering of accounts of a dissolved firm

  3. A suit for realization of the property of a dissolved firm

  4. All of the above

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Correct Option: D

In which of the following case Garner Vs Murray rule is NOT applicable?
$1$. Only one partner is solvent.
$2$. All partners are insolvent.
$3$. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options given.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. $1$ only

  2. $1$ & $2$ only

  3. $3$

  4. $1, 2$ & $3$

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Correct Option: D

In order for a firm to successfully carry out price discrimination which of the following conditions must hold?
I. The fine should not face a downward sloping demand curve
II. The firm must have a market power
III. Buyers with differing demand must be separable.
IV. The firm must have motives beyond profit maximization.
V. The firm must able to prevent the re-sale of its product.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. I, III & V only

  2. III & IV only

  3. l & IV only

  4. II, III & V only

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Correct Option: A

A partnership may be dissolved __________________.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. On death of partner

  2. On completion of work or venture

  3. On expiry of term

  4. All the above

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Correct Option: D
Explanation:
Dissolution of partnership implies not only a complete closure or termination of partnership business but it also includes any change in the existing agreement among the partners due to a change in the number of partners. A partnership may be dissolved under following conditions:
a) on death of partner
b) On completion of work or venture
c) On expiry of term.

Which of the advantages of LLP states that one partner is not responsible or liable for another partners misconduct or negligence.

elements of business partnership 1 - meaning, definition, characteristics and kinds types of partnership types of partnerships dissolution of partnership

  1. Flexible agreement

  2. Separate legal entity

  3. Fewer compliance requirements

  4. Easy to wind-up

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Correct Option: B
Explanation:

Separate legal entity of LLP states that one partner is not responsible or liable for another partners misconduct or negligence. Limited Liability Partnership can be defined as form of partnership where the partner or investor's liability is limited to the amount invested in the company.