The order of payment on the dissolution of a firm involves settling the firm's obligations in a specific sequence. The usual order of payment is as follows:

Outside Creditors:

• Payment is made to external creditors, including loans and other liabilities that are not owed to partners.

Partners' Loans:

• Partners' loans are settled next, if there are any outstanding loans from the partners to the firm.

Unsecured Creditors:

• Payment to unsecured creditors comes after settling partners' loans. Unsecured creditors are those who do not have a specific claim on the firm's assets, unlike secured creditors.

Capital Accounts of Partners:

• The remaining funds are used to settle the partners' capital accounts. Each partner receives their share of the remaining assets after all liabilities have been paid.

Residual or Profit and Loss Sharing:

• If there are any remaining assets after settling the capital accounts, the partners share in the profits or losses in accordance with their profit-sharing ratio.

It's important to note that the specific order can vary based on the terms of the partnership agreement or any legal requirements in the jurisdiction where the firm is dissolved. Partners may agree on a different order of payment, and the process is often subject to negotiation and agreement among the partners.