On the dissolution of the partnership firm the amount realised from sale of assets shall be applied in following order:(a) Distributing the amount left among the partners in their profit sharing ratio(b) Paying amount due to partner on account of loan advanced by him(c) Paying amount due to the creditors(d) Paying partners' capital account balancesChoose the correct answer from the options given below:
- A(b), (d), (a), (c)
- B(c), (b), (d), (a)
- C(a), (b), (c), (d)
- D(b), (a), (d), (c)
Solution & Step-by-step Explanation
According to Section 48 of the Indian Partnership Act, 1932, the order of payment on dissolution is:1st - Outside debts/creditors (c)2nd - Partner's loans to the firm (b)3rd - Partners' capital balances (d)4th - The residue, if any, is divided among the partners in their profit sharing ratio (a).Order: (c), (b), (d), (a).