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At the time of dissolution, if the available cash is insufficient to pay the firm’s external liabilities, what is generally done?

Answer and explanation

Correct answer: साझेदार आवश्यक नकद राशि फर्म में लाकर देयताओं का भुगतान करते हैं

External liabilities must be settled during dissolution. If the firm does not have enough cash, the partners generally bring in the required amount so that these liabilities can be paid. Ignoring the creditors or increasing the realisation profit does not settle the firm’s obligation. Exam tip: remember that external liabilities are paid before any surplus is distributed among the partners.

Related tags

Partnership DissolutionRealisation AccountExternal LiabilitiesPartners ContributionAccountancy Class 12Dissolution Of A Partnership FirmAccountancyClass 12 Mcq

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