Question : Assertion (A): Although not specifically mentioned in the definition, the partnership's business should be legal.
Reason (R): Any illegal activity is prohibited in the country. As a result, the business must also be legal to operate.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Both Assertion (A) and Reason (R) are not correct
Correct Answer: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Solution : The business of the partnership should be lawful.
Hence the correct answer is option 1.
Question : Assertion (A): Dissolution of Partnership may or may not result into closing down of the business. Reason (R): Dissolution of Partnership firm means close down of business and comes to an end.
Question : Assertion (A): A partnership firm does not exist as a separate legal entity apart from the partners who comprise it.
Reason (R): The Central Government has established a limit of 100 partners in a firm.
Question : Assertion (A): When partners agree on a profit-sharing ratio, they also agree on a loss-sharing ratio.
Reason (R): Although it is stated in the definition that profits will be shared. However, profits also include losses.
Question : Assertion (A): A new business is likely to have lesser goodwill. Reason (R): Goodwill is an intangible asset.
Question : Assertion (A): Dissolution of Partnership results in no change in the economic relationship. Reason (R): Dissolution of Partnership firm results in the ending of the economic relationship.
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