Question : On dissolution of the firm, what payment is made first from the personal assets of a partner?
Option 1: Firm debts
Option 2: Private debts
Option 3: The firm's debt and private debt both
Option 4: None of the above
Answer (1)
22nd Jan, 2024
Correct Answer: Private debts
Solution : Answer = Private debts
On dissolution of a firm, the personal assets of a partner are applied first in payment of their private debts. If there are any surplus funds after paying private debts, they are applied to payment of the firm's debts or paid to the partner.
Hence, the correct option is 2.
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