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Standard XII
Accountancy
Question

In which of the following case Garner v. Murray rule is NOT applicable?
1. Only one partner is solvent
2. All partners are insolvent
3. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options giiven below :-
  1. 1 Only
  2. 1 & 2 only
  3. 3 only
  4. 1, 2 & 3

A
3 only
B
1 & 2 only
C
1, 2 & 3
D
1 Only
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Solution
Verified by Toppr

Garner Vs Murray rule states that only one partner being insolvent other solvent pays the loss in capital ratio.
As per this statement, all the options are not under Garner Vs Murray rule.
The first option is not applicable because in this case only one partner is solvent and there must be at least two solvent partners.
The second option is again not applicable because here partners are insolvent and there is no partner to pay the loss of insolvency.
The third option doesn't go with the rule because the firm has used its own methods for insolvency rather than using Garner vs Murray rule.

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Similar Questions
Q1
In which of the following case Garner v Murray rule is NOT applicable?
1. Only one partner is solvent.
2. All partners are insolvent.
3. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options given below-
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Q2
In which of the following case Garner v. Murray rule is NOT applicable?
1. Only one partner is solvent
2. All partners are insolvent
3. When partnership deed provides a specific method to be followed in case of insolvency of a partner
Select the correct answer from the options giiven below :-
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Q3
A, B, C and D are partners sharing profits and losses in the ratio of 3 : 3 : 2 : 1. The partnership is dissolved and D becomes insolvent. C brings only the share of loss and shows his inability toI contribute anything towards D's deficiency. According to Garner vs. Murray ruling, D's deficiency in total will be shared by _____________________.

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Q4
When the partners capital accounts are fixed, then as per the decision in the Garner vs. Murray case, any loss arising due to the capital deficiency in the insolvent partners' capital accounts is to be borne by solvent partners in __________ .
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Q5
In Garner v. Murray, the deficiency of the insolvent partners is borne by other partners in the _________________.

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