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State the order of payment of the following, in case of dissolution of partnership firm: (i) to each partner proportionately what is due to him / her from the firm for advances as distinguished from capital (i.e., partner’s loan); (ii) to each partner proportionately what is due to him on account of capital; and (iii) for the debts of the firm to the third parties. (CBSE Sample Paper 2019)

SOLUTION

(iii) for the debts of the firm to the third parties;
(i) to each partner proportionately what is due to him/her from the firm for advances as distinguished from capital (i.e., partner’s loan); and
(ii) to each partner proportionately what is due to him on account of capital.



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