Partnerships

What is one drawback of running a business as a partnership?

Feb/March 2020

Tia and Sarna are partners in a trading enterprise. Their trial balance on 31 December 2019 is shown below: Tia and Sarna - Trial Balance at 31 December 2019 (the debit and credit figures appear in the exam paper) Additional information: 1 Inventory at 31 December 2019 was valued at $5 165. 2 Depreciation on furniture is to be charged at 20% per annum using the straight-line method. 3 The insurance figure includes a payment of $2 160 for the 12 months from 1 July 2019 to 30 June 2020. 4 The partnership agreement states that interest on capital is 5% per annum, Tia is to receive a salary of $6 000 per annum and the remaining profits and losses are to be shared equally.

Feb/March 2020

In the partnership accounts, how is interest on drawings entered?

Feb/March 2023

Javed and Yani operated as a partnership and divided profits and losses equally. After appropriation, the remaining profit for the year was $47\,000$. Yani supplied the following figures. interest on capital $2400$ interest on drawings $600$ salary $3000$ drawings $18\,000$ At the beginning of the year, Yani’s current account showed a credit balance of $1500$. What was Yani’s current account balance at the end of the year?

Feb/March 2023

Samir and Punita operate as partners. Their partnership agreement sets out the following: interest on drawings of 5% interest on capital of 3% per annum a salary to Punita of $11000 per annum any remaining profits and losses are shared 60% to Samir and 40% to Punita. The partners gave this information. Profit for the year ended 31 December 2022 $24600 Capital account balances at 1 January 2022: Samir $80000 Punita $75000 Current account balances at 1 January 2022: Samir $6450 credit Punita $8335 credit Drawings for the year ended 31 December 2022: Samir $16000 Punita $12400

Feb/March 2023

What benefits could a sole trader gain by setting up a partnership?

Feb/March 2024

X, Y and Z are partners who divide profits and losses in the ratio $5 : 3 : 2$. For the year, their business earned a profit of $\$8000$. The information below was given. What was Z’s share of the residual profit?

Feb/March 2024

Ann and Ben are partners, and they divide profits and losses in equal shares. The following figures relate to the year ending 30 April. profit for the year: $20000$ interest on capital - Ann: $5000$, Ben: $4000$ drawings - Ann: $8000$, Ben: $7000$ How much of the residual profit was Ben’s share?

Feb/March 2025

Frankie is one of the partners. He maintains both a capital account and a current account. Which of the statements below is correct?

Feb/March 2025

What is one advantage of setting up a partnership?

May/June 2021

Ann and Ben are partners and divide profits and losses equally. They were given the following figures for the year ending 30 April 2021: profit for the year $20\,000$ interest on capital: Ann $5\,000$, Ben $4\,000$ drawings: Ann $8\,000$, Ben $7\,000$ What amount of residual profit was Ben entitled to?

May/June 2021

What is one benefit of setting up a partnership?

May/June 2021

Ann and Ben operate a partnership and divide profits and losses equally. They supplied the following information for the year ended 30 April 2021. What was Ben’s portion of the residual profit?

May/June 2021

John and Banu operate as partners. The partners supplied the following balances at 31 March 2021. Revenue $158000 Inventory at 1 April 2020 $9400 Purchases $69200 Rates and insurance $11250 Wages $10475 General expenses $9675 Discount allowed $2000 Commission receivable $4800 Balance at bank $4000 Trade receivables $14150 Trade payables $5835 Premises at cost $130000 Fittings at cost $18000 Provision for depreciation of fittings $8100 Loan from John $10000 Capital accounts: John $75000, Banu $50000 Current accounts: John $4050, Banu $2365 Drawings: John $19000, Banu $21000 Additional information 1 Inventory at 31 March 2021 was measured at $9200. 2 Rates of $650 were unpaid at 31 March 2021. 3 Commission receivable of $300 was due at 31 March 2021. 4 Depreciation on fittings is to be charged at 15% per annum using the straight-line method. 5 The partnership agreement provides for: interest on partner’s loan of 5% per annum interest on drawings of 6% interest on capital of 3% per annum a salary to John of $8500 per annum residual profits and losses to be shared 40% to John and 60% to Banu.

May/June 2021

What is the purpose of drawing up a partnership appropriation account?

May/June 2022

Raj and Seema are partners, with profits and losses shared in the ratio $2:1$. During the year, Raj took out $5000$ and interest at $3\%$ was charged on this amount. Seema made no withdrawals in the year. The profit for the year came to $30000$. What amount was entered in Raj’s current account at the end of the year?

May/June 2022

Which item would not be included in a partnership appropriation account?

May/June 2022

Carol and Denise are partners, and they share profits and losses in the ratio 2:1. Denise’s current account showed these balances: on 1 May 2021, $2000 debit; on 1 May 2022, $7000 credit. She took no drawings during the year. What total profit did the partnership earn in the year ended 30 April 2022?

May/June 2022

Which item would not be shown in a partnership appropriation account?

May/June 2022

Carol and Denise are partners, with profits and losses divided in the ratio $2:1$. Denise’s current account showed these balances: on 1 May 2021 $2000$ debit; on 1 May 2022 $7000$ credit. She took no drawings over the year. What total profit did the partnership earn in the year ended 30 April 2022?

May/June 2022

What items are shown in a partnership appropriation account?

May/June 2023

X and Y are partners, with capital contributions of $50000 and $30000 respectively. Under the partnership agreement, profits are shared in line with the capital invested, and each partner receives 10% interest on capital. The profit for the year amounted to $37000. What total amount was credited to Y’s current account at the end of the year?

May/June 2023

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

May/June 2023

Abi and Erni are in partnership. Erni receives a yearly partnership salary of $3000. Any remaining profits and losses are split equally. For the year ending 31 August 2022, profit came to $12600. At 1 September 2021, the partners’ current account balances were: Abi: credit balance of $2500 Erni: debit balance of $1400 What credit balance was shown on Erni’s current account on 1 September 2022?

May/June 2023

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

May/June 2023

Abi and Erni operate a partnership. Erni is entitled to receive an annual partnership salary of $3000$. The remaining profits and losses are divided equally. The profit for the year ending 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?

May/June 2023

Akila and Darius are partners. Their partnership agreement states the following: interest on capital at 3% per annum interest on drawings at 5% a salary of $9500 per annum to Akila remaining profits and losses to be divided 60% to Akila and 40% to Darius. The partners produced the following balance list. Capital accounts at 1 May 2022: Akila $90000; Darius $65000 Current accounts at 1 May 2022: Akila $2600 debit; Darius $4745 credit Drawings for the year ended 30 April 2023: Akila $19400; Darius $16320 Profit for the year ended 30 April 2023 amounted to $42304.

May/June 2023

Akila and Darius are in partnership. Their partnership agreement states the following: interest on capital of 3% per annum interest on drawings of 5% a salary to Akila of $9500 per annum residual profits and losses to be shared 60% to Akila and 40% to Darius. The partners supplied the following balances. Capital accounts at 1 May 2022: Akila $90000, Darius $65000 Current accounts at 1 May 2022: Akila $2600 debit, Darius $4745 credit Drawings for the year ended 30 April 2023: Akila $19400, Darius $16320 The profit for the year ended 30 April 2023 was $42304.

May/June 2023

What is included in a partnership appropriation account?

May/June 2024

Rajid and Sunil set up a partnership on 1 January 2019, but they did not make a partnership agreement. The information below was given. Capital brought in on 1 January 2019: Rajid $40000, Sunil $20000 Withdrawals during the year ended 31 December 2019: Rajid $5000, Sunil $3500 Division of work: 50% each They planned to create a partnership agreement for later years. Which item would be most advantageous to Rajid in 2020?

May/June 2024

In which section of the accounting records of a partnership business is interest on drawings recorded?

May/June 2024

In the accounting records of a partnership business, where is interest on drawings recorded?

May/June 2024

Tadeen and Yadid are lawyers who have worked in partnership for many years. The partners supplied the trial balance shown at 30 April 2024. Additional information: Rates and insurance include $1920 for the period 1 March 2024 to 28 February 2025. By 30 April 2024, salaries of $1800 were owing and unpaid. Irrecoverable receivables amounting to $670 must be written off. Depreciation on fittings and equipment is to be charged at 15% per annum by the straight line method. The partnership agreement states that interest on partner’s loan is 6% per annum, interest on drawings is 5%, interest on capital is 3% per annum, Yadid is to receive a salary of $10 000 per annum, and residual profits and losses are to be divided 60% to Tadeen and 40% to Yadid. The partners employ one lawyer together with office staff. The lawyer, Lakia, is paid $25 000 but has decided to leave. Tadeen and Yadid have identified a replacement lawyer, Raim. He has been practising law for 15 years and is well known locally. However, Raim wants to join the business as a partner rather than remain an employee and would expect 40% of the partnership’s residual profit each year.

May/June 2024

Tadeen and Yadid are lawyers who have worked in partnership for many years. The partners supplied the following trial balance at 30 April 2024.

May/June 2024

What benefit can a sole trader gain by becoming part of a partnership?

May/June 2025

Which of the following statements are correct concerning the financial statements of a partnership?

May/June 2025

Ann and Bob operate as partners and divide profits in the ratio $3:2$ respectively. Ann is paid a salary of $20\,000 per annum. There is no interest on capital or interest on drawings. The profit for the year totals $75\,000$. Ann’s share of the residual profit was $24\,000. What salary was Bob entitled to?

May/June 2025

What benefit would a sole trader gain by setting up a partnership?

May/June 2025

Which statements are correct about the financial statements of a partnership?

May/June 2025

Farah and Salma are sisters operating as a partnership. Their partnership agreement states: interest on capital of 2% per annum interest on drawings of 4% per annum a salary to Farah of $11 200 per annum residual profits and losses to be shared as Farah 30%, Salma 70%. Farah and Salma gave the following information. Profit for the year ended 28 February 2025 $38 175 Capital accounts at 1 March 2024: Farah $52 000, Salma $75 000 Current accounts at 1 March 2024: Farah $3450 credit, Salma $1900 debit Drawings for the year ended 28 February 2025: Farah drawn from bank on 31 December 2024 $14 250; Salma drawn from bank on 31 December 2024 $14 250; Salma goods taken for own use 31 August 2024 $5750

May/June 2025

John and Mark are partners in a partnership. Their profits and losses are divided in the ratio 3:2. John receives an annual salary of \$12. The profit for the year ending 31 August 2020 amounted to \$520. How much would be credited to the partners’ current accounts on 31 August 2020?

Oct/Nov 2020

A partnership keeps both current accounts and capital accounts for every partner. A book-keeper with little experience drew up the account below, but it includes mistakes. Owen capital account: Debit: balance c/d $1350 Credit: balance b/d $1000; loan made to partnership $300; interest on capital $50 What figure should be shown as the closing balance on Owen’s capital account?

Oct/Nov 2020

Besides a share of the profit, a partner receives interest on capital and a salary, and pays interest on drawings. In what way are these entered in the partner’s ledger accounts?

Oct/Nov 2020

John and Mark operate as partners. Their profits and losses are divided in the ratio $3:2$. John receives an annual salary of $\$12\,000$. The profit for the year ended 31 August 2020 was $\$52\,000$. What sum would be entered on the credit side of the partners’ current accounts on 31 August 2020?

Oct/Nov 2020

For every partner, a partnership keeps both current accounts and capital accounts. A novice book-keeper drew up the account below, but it includes mistakes. Owen capital account shows: debit balance c/d $\$135\,000$; credit balance b/d $\$100\,000$; loan made to partnership $\$30\,000$; interest on capital $\$5\,000$. What closing balance should be shown on Owen’s capital account?

Oct/Nov 2020

Anwar runs a sole proprietorship and earns yearly profits of $24000. He chooses to bring Dilip in as a partner. They agree that Anwar will be paid a salary, while profits and losses are to be divided equally. The projected appropriation account for the partnership’s first year of trading is shown. By what amount will Anwar’s total income rise?

Oct/Nov 2021

Kasi and Ravi are partners. In the financial statements for the year ended 31 August 2021, Ravi received interest on capital and interest on loan, and interest on drawings was deducted from him. Which entries should be recorded in Ravi’s current account?

Oct/Nov 2021

Hassin realised that he needed assistance to manage his business. He chose to bring in a partner instead of hiring an assistant. Why did he choose to bring in a partner?

Oct/Nov 2021

Anwar runs a sole trader business and earns annual profits of $24000. He chooses to take Dilip in as a partner. They agree that Anwar will be paid a salary, and that profits and losses will be split equally. The projected appropriation account for the partnership’s first year of trading is: profit for the year $50000 salary Anwar $10000 profit available for distribution $40000 By what amount will Anwar’s total income rise?

Oct/Nov 2021

Anwar is a sole trader who makes annual profits of $24000. He chooses to bring Dilip in as a partner. They agree that Anwar will be paid a salary, and that profits and losses will be split equally. The forecast appropriation account for the partnership’s first year of trading is shown. By how much will Anwar’s total income rise?

Oct/Nov 2021

Kasi and Ravi are partners in a partnership. The financial statements for the year ended 31 August 2021 showed that Ravi had earned interest on capital and interest on loan, and had been charged interest on drawings. Which entries should be recorded in Ravi’s current account?

Oct/Nov 2021

What items might be included in a partnership appropriation account?

Oct/Nov 2022

Anne and Paul run a partnership. In the partnership ledger accounts, how would interest on Anne’s capital be recorded?

Oct/Nov 2022

What items can be shown in a partnership appropriation account?

Oct/Nov 2022

Anne and Paul are partners in a partnership. In the partnership’s ledger accounts, how would interest on Anne’s capital be entered?

Oct/Nov 2022

Sian and Tom are partners and divide profits and losses in line with the capital each has invested. Their partnership agreement sets out the following: 1 Capital is to earn interest at 6% per annum. 2 Sian is to receive a salary of $20000 per annum. 3 Drawings are charged interest at 3% per annum, calculated for each fraction of the year. The profit for the year before appropriation for the year ended 31 March 2022 was $59190. Drawings made during the year were: 1 April 2021: Sian $8000, Tom $10000 1 October 2021: Sian $6000, Tom $12000 The capital account balances on 1 April 2021 were: Sian $150000 Tom $100000 The current account balances on 1 April 2021 were: Sian $3000 credit Tom $7000 debit

Oct/Nov 2022

Pari and Ira operate as partners, with profits and losses divided equally. Interest is credited on the capital account balances at $6\%$ each year. Pari receives a salary of $5000 a year. At the beginning of the year, the capital account balances stood at $60000 for Pari and $40000 for Ira. The profit made during the year was $27500. What amount of the remaining profit was posted to Pari’s current account at the year end?

Oct/Nov 2023

Josh and Karen run a partnership and divide profits and losses in the ratio $3:2$. Interest on capital is paid at $5\%$. Josh is to receive a salary of $10\,000$ per annum. After salary and interest on capital had been deducted, the residual profit was $20,000$. The capital account balances at the start of the year were: Josh $60\,000$ and Karen $40\,000$. How much in total was credited to Josh’s current account at the end of the year?

Oct/Nov 2023

A partner is debited with interest on the drawings they withdrew during a financial year. How is this entered in the partner’s accounts?

Oct/Nov 2023

Pari and Ira are partners, with profits and losses divided equally. Interest on the balances in the capital account is payable at 6% per annum. Pari is to receive a salary of $5000 per annum. At the beginning of the year, the capital account balances stood at $60000 for Pari and $40000 for Ira. The profit for the year was $27500. What amount of residual profit was credited to Pari’s current account at the end of the year?

Oct/Nov 2023

John and Mark operate as partners. Profits and losses are divided in the ratio $3:2$. John receives an annual salary of $12000. For the year ending 31 August 2023, the profit was $52000. What amount should be credited to the partners’ current accounts on 31 August 2023?

Oct/Nov 2024

What benefit does a trader gain from forming a partnership?

Oct/Nov 2024

What items are included in the appropriation account of a partnership?

Oct/Nov 2024

John and Mark operate a partnership. Profits and losses are divided in the ratio $3:2$. John receives an annual salary of $12000$. The profit for the year ended 31 August 2023 amounted to $52000$. How much would be credited to the partners’ current accounts on 31 August 2023?

Oct/Nov 2024

Ali and Sai are in partnership, and their financial year finishes on 30 June. The partnership agreement contains these terms. Interest on capital is allowed at 6% per annum. Interest on drawings is charged at 5%. Sai receives a partnership salary of $10050 per annum. Ali and Sai divide residual profits and losses in the ratio 3:2. Ali and Sai have given the following details: Drawings for the year ended 30 June 2024: Ali $11000, Sai $16000 Capital at 1 July 2023: Ali $60000, Sai $40000 Current account at 1 July 2023: Ali $1800 debit, Sai $250 credit Profit for the year before interest on loan was $42700. Ali lent $10000 to the partnership at an interest rate of 5% per annum. The interest for the year ended 30 June 2024 has already been paid. No other loans are held by the partnership.

Oct/Nov 2024

Ali and Sai are partners, and their financial year finishes on 30 June. Their partnership agreement contains the following provisions. Interest on capital is to be allowed at 6% per annum. Interest on drawings is to be charged at 5%. Sai is to receive a partnership salary of $10050 per annum. Ali and Sai divide residual profits and losses in the ratio 3:2. Ali and Sai have supplied the following details: Ali: Drawings for the year ended 30 June 2024 $11000; Capital at 1 July 2023 $60000; Current account at 1 July 2023 $1800 debit. Sai: Drawings for the year ended 30 June 2024 $16000; Capital at 1 July 2023 $40000; Current account at 1 July 2023 $250 credit. Profit for the year before interest on loan was $42700. Ali advanced a loan of $10000 to the partnership at an interest rate of 5% per annum. The interest for the year ended 30 June 2024 has already been paid. There are no other loans in the partnership.

Oct/Nov 2024

Jack and Gill are starting a business together as partners and are thinking about putting a partnership agreement in writing. What would not be included in any partnership agreement prepared by them?

Oct/Nov 2025

Raj and Rohit are partners and share profits and losses in the ratio of 2:1. Raj receives an annual salary of $3000. For the year ended 31 December 2024, the profit was $14100. At 1 January 2024, Raj’s current account showed a debit balance of $1800. What was the credit balance on Raj’s current account on 1 January 2025?

Oct/Nov 2025

X and Y have formed a partnership, with profits shared in the ratio $2:1$. The trading profit in the first year was $33000$. X is allowed interest on capital of $2000$, and Y is paid a partner’s salary of $4000$. Interest charged on drawings is $200$ for X and $100$ for Y. Determine X’s share of the residual profit for the year.

Oct/Nov 2025

What is the correct sequence for preparing accounts for a partnership?

Oct/Nov 2025

Talula runs a hairdressing salon. She also lets out part of her property to Sheila, who provides a range of beauty treatments. Talula supplied the information below for the year ended 30 September 2025.

Oct/Nov 2025