Question

Distinguish between ‘Dissolution of Partnership’ and ‘Dissolution of Partnership Firm’ based on: 

(i) Settlement of assets and liabilities 

(ii) Economic relationship

Answer 1

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.
Economic relationship	Economic relationship between the partners continues, though in a changed form.	Economic relationship between the partners comes to an end.