In a partnership, which of the following is NOT typically a reason for dissoluti
Practice Questions
Q1
In a partnership, which of the following is NOT typically a reason for dissolution?
Mutual agreement of partners
Insolvency of one partner
Change in business strategy
Increase in profit margins
Questions & Step-by-Step Solutions
In a partnership, which of the following is NOT typically a reason for dissolution?
Step 1: Understand what a partnership is. A partnership is a business arrangement where two or more individuals share ownership and responsibilities.
Step 2: Learn what dissolution means. Dissolution is the process of ending a partnership.
Step 3: Identify common reasons for dissolution. Common reasons include disagreements between partners, financial losses, or one partner wanting to leave.
Step 4: Consider the term 'increase in profit margins.' This means the business is making more money, which is a good thing.
Step 5: Conclude that an increase in profit margins is not a reason for dissolution. Instead, it is a positive outcome that would encourage the partnership to continue.
