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# Dissolution of Partnership Firm
Dissolution of Partnership Firm is chapter 4 in Accountancy Part - I, a CBSE Class 12 book for the subject Accountancy on Edzy.

## Knowledge Snapshot
| Field | Details |
| :--- | :--- |
| Board | CBSE |
| Curriculum | CBSE |
| Class | Class 12 |
| Subject | Accountancy |
| Book | Accountancy Part - I |
| Chapter | Dissolution of Partnership Firm |
| Chapter Number In Book | 4 |
| Chapter Slug | dissolution-of-partnership-firm |
| Pages | 156-170 |
| Page Count | 15 |
| Source PDF | https://edzy-ai.s3.ap-south-1.amazonaws.com/edzy-express-ts/d36ca3ab-2e10-461c-a344-1f2f0af5e4dc.pdf |
| Last Updated | 2026-06-25 |

## Chapter Overview
This chapter discusses the concept of dissolution within partnerships, explaining how the existing partnership relationship between partners may change while allowing for the firm to potentially continue its operations. It elaborates on the legal framework governing the dissolution of partnerships and firms as per the Partnership Act 1932, alongside drawing distinctions between these two terms.

## Topic Inventory
| No. | Topic ID | Topic |
| :--- | :--- | :--- |
| 1 | 69aa66e1a243cecf9621b0eb | Dissolution of Partnership |
| 2 | 69aa66e1a243cecf9621b0ed | Dissolution of a Firm |
| 3 | 69aa66e1a243cecf9621b0ef | Settlement of Accounts |
| 4 | 69aa66e1a243cecf9621b0f1 | Accounting Treatment |

## Topic-Wise Extracted Content
### Dissolution of Partnership
The dissolution of partnership changes the existing relationship between partners, but the firm may continue its business as before. The dissolution of partnership can occur due to several reasons including a change in the existing profit-sharing ratio, the admission or retirement of a partner, the death of a partner, insolvency, completion of the venture, or expiration of the partnership period.

### Dissolution of a Firm
Dissolution of a firm can occur with or without court intervention and involves several provisions that clarify how it can take place. This includes dissolution by agreement, compulsory dissolution under certain conditions, dissolution upon the happening of specific contingencies, and dissolution by notice or by court orders under various grounds.

### Settlement of Accounts
Upon dissolution, a firm ceases its business and must settle its accounts by disposing of all assets to satisfy claims against it, following the specific regulations outlined in the Partnership Act. The allocated treatment of losses and the application of assets play a crucial role in this settling process.

### Accounting Treatment
During dissolution, the firm must prepare a Realisation Account to determine the profit or loss from the realization of assets and discharge of liabilities. All assets and external liabilities are recorded in this account, which ultimately affects the partners' capital accounts according to their profit-sharing ratio.

## Key Ideas
- The dissolution of a partnership does not terminate the firm's business.
- Dissolution of a firm necessarily brings about the dissolution of the partnership.
- The treatment of losses during settlement is stipulated by law, divided among partners as specified.

## Important Chapter Facts
- The chapter is Dissolution of Partnership Firm.
- The chapter number in the book is 4.
- The subject is Accountancy.
- The book is Accountancy Part - I.
- The class is Class 12.
- The source PDF is https://edzy-ai.s3.ap-south-1.amazonaws.com/edzy-express-ts/d36ca3ab-2e10-461c-a344-1f2f0af5e4dc.pdf.
- The chapter covers pages 156-170.
- The chapter page count is 15.
- The topic list contains the supplied topic entries.

## Related OKF Entities
| Entity Type | Title | URL |
| :--- | :--- | :--- |
| Chapter Canonical Page | Dissolution of Partnership Firm | https://www.edzy.ai/cbse-class-12-accountancy-accountancy-part-i-dissolution-of-partnership-firm |
| Chapter Markdown | Dissolution of Partnership Firm | https://www.edzy.ai/okf/chapter/cbse-class-12-accountancy-accountancy-part-i-dissolution-of-partnership-firm.md |
| Source PDF | Dissolution of Partnership Firm | https://edzy-ai.s3.ap-south-1.amazonaws.com/edzy-express-ts/d36ca3ab-2e10-461c-a344-1f2f0af5e4dc.pdf |

## Source Attribution
| Field | Value |
| :--- | :--- |
| Source | Edzy |
| Reference Type | examSubjectBookChapter |
| Reference ID | 66def4f83f8b4e9e69bd6f8f |
| Chapter ID | 66def4f83f8b4e9e69bd6f8f |
| Canonical URL | https://www.edzy.ai/cbse-class-12-accountancy-accountancy-part-i-dissolution-of-partnership-firm |
| Markdown URL | https://www.edzy.ai/okf/chapter/cbse-class-12-accountancy-accountancy-part-i-dissolution-of-partnership-firm.md |
| Source PDF | https://edzy-ai.s3.ap-south-1.amazonaws.com/edzy-express-ts/d36ca3ab-2e10-461c-a344-1f2f0af5e4dc.pdf |
| Last Updated | 2026-06-25 |