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?
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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