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What is the final objective to ensure in the dissolution process?

Answer and explanation

Correct answer: Properly settling all assets and liabilities and closing the firm’s accounts

In dissolution, the firm’s business is wound up by realising its assets, paying its liabilities, and settling the partners’ capital accounts. Therefore, the final objective is the proper settlement and closure of all accounts. Raising new capital or admitting a new partner relates to continuing or reconstituting the firm, not dissolving it. Exam tip: Dissolution means ending the firm’s business and finally settling its affairs.

Related tags

Partnership DissolutionRealisation AccountSettlement Of AccountsClosing BusinessAccountancy Class 12Closing The BusinessDissolution Of A Partnership FirmAccountancy

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