Settlement of accounts

Settlement of accounts:

The mode of settlement of accounts between partners after the dissolution of a firm is determined by the partnership agreement in the absence of any specific agreement between them in this regard provisions of accounts.

1.sale of goodwill:

In setting the accounts of a firm after dissolution the goodwill shall be included in the assets and it may be sold either seperatly or along with other property of the firm.

2.sharing of defisiancy:

If the case of the firm are insufficient to discharge the debts and liabilities of the firm the partners shall bear defficiancy in the proportion in which they were entitled to share profits thus losses, including deficiencies of capital, shall be paid-

1.first out of profits.

2.next out of capital, and

3.lastly if nessary by the partners individually in the proportion in which they were entitled to share profits.