Partnership Accounts Quiz
7 multiple-choice questions with answers and explanations · 2 easy, 4 medium, 1 hard
The appropriation account, interest on capital and drawings, partners’ salaries, capital and current accounts, and goodwill on admission.
- 1Partnership Accounts: The Appropriation AccountThe purpose of a partnership appropriation account is:easy
- 2Partnership: How Is Profit Shared When There Is No Agreement?Where partners have made no agreement on profit sharing, the general legal rule is that profits and losses are shared:easy
- 3Partnership: Is a Partner's Salary an Expense?In partnership accounts, a salary allowed to a partner is treated as:medium
- 4Partnership: Capital Account vs Current AccountWhere partners keep fixed capital accounts, a partner’s CURRENT account records:medium
- 5Partnership: Interest on Drawings in the Appropriation AccountInterest charged to partners on their drawings is:medium
- 6Partnership: Profit Share After Salary and Interest on CapitalA and B are partners. Net profit is $60,000. A receives a salary of $10,000; interest on capital is 5% on A’s $40,000 and B’s $60,000; the balance is shared 3 : 2. What is A’s total share of profit?medium
- 7Partnership: Goodwill Adjustment on the Admission of a New PartnerA and B share profits equally. Goodwill is valued at $30,000 and is not to remain in the books. C is admitted, and the new profit-sharing ratio is A : B : C = 2 : 2 : 1. What is the net goodwill adjustment to A’s capital account?hard