Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’ based on:
(i) Settlement of assets and liabilities
(ii) Economic relationship
Answer
| BASIS OF DISTINCTION | DISSOLUTION OF PARTNERSHIP | DISSOLUTION OF PARTNERSHIP FIRM |
| Settlement of Assets and Liabilities | Assets are revalued and liabilities are reassessed |
Assets are sold and Liabilities are paid off The balance if any, is distributed among all the partners |
| Economic relationship | Economic relationship between the partners ends | Economic relationship between the partners changes |