In a partnership, which of the following is NOT typically a reason for dissolution?
Practice Questions
1 question
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
Increase in profit margins is generally not a reason for dissolution; rather, it is a positive outcome.
Questions & Step-by-step Solutions
1 item
Q
Q: In a partnership, which of the following is NOT typically a reason for dissolution?
Solution: Increase in profit margins is generally not a reason for dissolution; rather, it is a positive outcome.
Steps: 5
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.
