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easyMCQCUET Accountancy 2025 30 May Shift 12026Accountancy
1 mark

A, B and C are partners in a firm. If B is being retired from the firm, what would be its effect?

  1. A
    Nothing is affected.
  2. B
    Old firm and old partnership would be dissolved
  3. C
    Old firm would be dissolved
  4. D
    Old partnership would be reconstituted

Solution & Step-by-step Explanation

When a partner retires, the existing relationship between partners changes, leading to the dissolution of the old partnership agreement, but the business entity (firm) continues to operate under a new agreement. Therefore, the old partnership is reconstituted.

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Try it yourself before checking the explanation above.

A, B and C are partners in a firm. If B is being retired from the firm, what would be its effect?
A
Nothing is affected.
B
Old firm and old partnership would be dissolved
C
Old firm would be dissolved
D
Old partnership would be reconstituted

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