Partnership IGCSE

A partnership appropriation account should include the following?

• shares of residual loss, partnership salaries, drawings, interest on partners' loans

• shares of residual loss, partnership salaries, interest on partners' loans, interest on capital

• shares of residual profit, partnership salaries, drawings, interest on partners' loans

• shares of residual profit, partnership salaries, interest on drawings, interest on capitals

Fred and Garca are in partnership sharing profits and losses in the ratio 3:2 respectively. This year the partnership has made a loss of $90,000. Which entry should be made in Fred's current account?

• Credit $36,000

• Credit $54,000

• Debit $36,000

• Dedit $54,000

Which of the following is debited to a partnership appropriation account?

• interest on drawings

• interest on a partner's loan

• partner's salary

• share of loss

Sara and Tarek are in partnership, sharing profits and losses equally. Tarek is entitled for a salary of $18,000 per year. The partnership made a profit of$72,000. What is the total amount that should be credited to Tarek's current account?

• $27,000

• $36,000

• $45,000

• $54,000

Tina and Unitali are in partnership sharing profits and losses equally. Both partners are entitled to receive salary: Tina $15,000 and Unitali $5,000. This year the partnership made a profit of $10.000. What is Tina's NET share of partnership's profit for the year?

• $2,500

• $5,000

• $10,000

• $20,000

In the books of a partnership, which account should be credited with interest of drawings?

• appropriation account

• bank account

• partner's current accounts

• partner's drawings accounts

On 1 January 2014, Lionel had a debit balance of his current account of $2,000. During the year, the following were recorded in his current account.

Interest on capital $12,500.

Interest on drawings $840.

Share of residual profit $18,000.

Drawings $25,600.

What was the balance of Lionel's current account on 1 January 2015?

• $2,060 credit

• $3,740 credit

• $6,060 credit

• $7,740 credit

Why does a partnership prepare an appropriation account?

• to allocate profit for the year to each partner

• to calculate interest on partners' loans

• to ensure that drawings are accounted for

• to record evidence paid and proposed

Where will interest on drawings be recorded?

• credited to partners' capital accounts

• credited to partners' current accounts

• debited to partners' capital accounts

• debited to partners' current accounts

Meena and Khan are in partnership, sharing profits and losses equally. Interest on capital account balances is to be allowed at 5%.

The capital account balances at the start of the year were: Meena $10,000; Khan $20,000.

The profit for the year was $28,000. How much was credited to Meena's current account at the end of the year?

• $13,250

• $13,750

• $14,000

• $14,250