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Numerical Example of Assets Realisation

On the dissol...

Question

On the dissolution of a firm, loan from the wife of a partner is treated as ____________.

A

Loan from the partner

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B

Outside liability

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C

Preferential liability

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D

Liability payable after all other debts have been paid

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Solution

The correct option is B Outside liability
Loan from a partners’ wife is to be treated as a normal creditor.
The basic aim of providing a loan in the name of partner’s wife is to by-pass the legal restrictions on the loan from a partner to the firm.

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