In a partnership account, conversation of non-cash assets into cash is referred to as?
Realization
Disposal
Dissolution
Revaluation
Correct answer is A
Realization account refers to an account opened by the firm when it goes to dissolution to record the profit made from the sale of assets and loss suffered on the settlement of liabilities. When non-assets are converted to cash its called realization.
N11,950
N10,950
N20
N0
NO OPTION
Correct answer is E
K capital contributed = 10000
10000 - 1,000 - 2000 - 100 - 10 = 6880
N25,000
N24,900
N22,900
N20,000
Correct answer is D
Assuming the partnership maintains a fixed capital balance P capital would be the balance brought down 20,000 (that is capital without drawings).
6,280
4,020
2,820
2,280
Correct answer is B
Profit and Loss Appropriation A/C
| partners salary - K 800 Int.on capital - M 2000 K 1000 share of profit - M 4020 K 2680 6700 10500 |
Net profit b/d 10000 Int. on drawings: M 500 10500 |
Sule 1/3, Ahmad 1/3 and Khadija 1/3
Sule 1/5, Ahmad 15 and Khadija 3/5
Sule 2/5, Ahmad 2/5 and Khadija 1/5
Sule 2/5, Ahmad 1/5 and Khadija 2/5
Correct answer is C
Recall that Sule and Ahmed have been sharing profit and losses equally. The admission of Khadija will only reduce the rate of losses and profits shared but will still be equally shared. The new sharing formula would be ;
2/5:25:15
2/5+25+15 = 5/5 = 1