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easyMCQCUET Accountancy2026Accountancy
1 mark

In case of dissolution of a partnership firm, losses, including deficiencies of capital, shall be paid first out of:

  1. A
    Capital of partners
  2. B
    Profits
  3. C
    Partners individual contribution in their profit sharing ratio
  4. D
    Borrowings

Solution & Step-by-step Explanation

According to Section 48 of the Indian Partnership Act, 1932, while settling accounts of a firm after dissolution, losses, including deficiencies of capital, shall be paid:First out of profitsNext out of capitalLastly, if necessary, by the partners individually in their profit-sharing ratio.

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In case of dissolution of a partnership firm, losses, including deficiencies of capital, shall be paid first out of:
A
Capital of partners
B
Profits
C
Partners individual contribution in their profit sharing ratio
D
Borrowings

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