Question

Distinguish between 'Dissolution of Partnership' and 'Dissolution of Partnership Firm' on the basis of closure of books.

Answer 1

Dissolution of Partnership does not involve closure of books since only the relationship between the partners changes. The assets and liabilities are revalued since the business still continues to exist but in a changed form.

Whereas, Dissolution of Partnership Firm terminates the ongoing business of the firm. This involves selling off the assets and discharging off the liabilities and closing all the books of accounts.