Question on: JAMB Accounting - 2017
Given:
I. Settlement of debts
II. Cessation of business
III. Introduction of assets
IV. Disposal of assets
Which of these constitutes dissolution of partnership?
A
II and IV only
B
I,II and IV only
C
I,II and III only
D
II,III and IV only
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Correct Option: B
Dissolution of a partnership refers to the termination of the partnership agreement and the ceasing of business operations. The following points explain why the correct answer is A:
- II. Cessation of business: This directly implies the end of the partnership's operations, indicating dissolution.
- IV. Disposal of assets: When a partnership dissolves, its assets are typically sold to settle debts and distribute the remaining value.
- I. Settlement of debts: This is part of the process of winding up the partnership after dissolution, but it doesn't inherently constitute the dissolution itself.
- III. Introduction of assets: This is an activity relating to the starting and continuous operation of a business, not the dissolution.
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