Accounting Chapter 19 - Past Year MCQ

Josh and Karen are in a partnership sharing profits and losses 3 : 2. Interest on capital is allowed at 5%. Salary payable to Josh is $10 000 per annum. The residual profit after deduction of salary and interest on capital was $20 000. The capital account balances at the start of the year were: Josh $60 000 and Karen $40 000. What was the total amount credited to Josh’s current account at the end of the year?

• $12 000
• $15 000
• $22 000
• $25 000

A partner is charged interest on the drawings he made during a financial year. How is this recorded in the partner’s accounts?

• credit the partner’s capital account
• credit the partner’s current account
• debit the partner’s capital account
• debit the partner’s current account

Pari and Ira are in a partnership, sharing profits and losses equally. Interest on the capital account balances is allowed at 6% per annum. Pari is entitled to a salary of $5000 per annum. The capital account balances at the start of the year were $60 000 for Pari and $40 000 for Ira. The profit for the year was $27 500. How much residual profit was credited to Pari’s current account at the end of the year?

• $8250
• $10 750
• $11 250
• $13 250

Which item is added to the profit for the year in a partnership appropriation account?

• interest on capital
• interest on drawings
• partners’ drawings
• partners’ salaries

Abi and Erni are in partnership. Erni is entitled to an annual partnership salary of $3000. They share residual profits and losses equally. The profit for the year ended 31 August 2022 was $12 600. On 1 September 2021, the partners’ current account balances were as follows. Abi $2500 credit Erni $1400 debit What was the credit balance on Erni’s current account on 1 September 2022?

• $400
• $3200
• $6400
• $9200

What is included in an appropriation account of a partnership? 1 annual salary to which each partner is entitled 2 drawings made by each partner during the year 3 the closing balance on each partner’s capital account 4 the division of residual profit between the partners

• 1, 2 and 3
• 1 and 4
• 2 and 3 only
• 4 only

X and Y are in partnership with capital of $50 000 and $30 000 respectively. The partnership agreement provides that profits are to be shared in proportion to capital invested and each partner is entitled to 10% interest on capital. Profit for the year was $37 000. What was the total amount credited to Y’s current account at the end of the year?

• $10 875
• $13 875
• $18 125
• $23 125

How is interest on drawings recorded in the books of a partnership?

• appropriation account (debit) partner’s capital account (credit)
• appropriation account (debit) partner’s current account (credit)
• partner's capital account (debit) appropriation account (credit)
• partner's current account (debit) appropriation account (credit)

Javed and Yani were in a partnership, sharing profits and losses equally. The residual profit for the year, after appropriation, was $47 000. Yani provided the following information. Yani’s current account balance at the start of the year was $1500 credit. What was Yani’s current account balance at the end of the year?

• $5800 credit
• $8200 credit
• $8800 credit
• $11 800 credit

What may appear in a partnership appropriation account?

• capital and current account balances
• interest on drawings and interest on partners’ loans
• partners’ salaries, drawings and profit for the year
• partners’ salaries, interest on capital and profit shares