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Dissolution Of Partnership Firm — Accountancy STD 12 Commerce — Question

CBSE BoardEnglish MediumSTD 12 CommerceAccountancyDissolution Of Partnership Firm1 Mark
MCQ
If a partner cannot clear his debts on dissolution, the other partners must clear these debts in the following manner:
  • A
    Debts are shared equally
  • B
    Debts should not be cleared by other partners
  • C
    Partnership profit/loss sharing ratio
  • ✓
    In the ratio of their last agreed capital balance
✓

Answer

Correct option: D.
In the ratio of their last agreed capital balance
If a partner can not clear his debts on dissolution, the amount not paid is a loss to the firm, which under the Garner vs Murray rule is to be borne by the solvent partner. The loss is a capital loss which should be borne by the solvent partners in the ratio of the capital in the balance sheet on the date of dissolution.

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