Net profit before any distributions were $10,000 and a partner had to get a salary of $1500 also he was charged drawing of $2000 how much profits will remain after calculations?
12,000 - 1500 = 10,500
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10
Share of profits is found on the credit side of the current account. True or False?
True
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boom
Lose 50 points!
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shark
Other team loses 15 points!
Okay!
rocket
Go to first place!
Okay!
banana
Go to last place!
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10
What are 2 disadvantages of a partnership?
Partners have unlimited liability in most cases (at least 1 partner) or capital is still limited in most regards or difficult to transfer partnerships
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5
Define a partnership business
A partnership is a business that has 2 to 20 owners who all work together with the main aim of making profits and also who shares these profits/losses
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banana
Go to last place!
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star
Double points!
Okay!
gift
Win 15 points!
Okay!
banana
Go to last place!
Oops!
boom
Lose 50 points!
Oops!
rocket
Go to first place!
Okay!
gift
Win 20 points!
Okay!
banana
Go to last place!
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10
Why would a partnership admit a new partner?
Need of more capital, need for new skills or for the purpose of replacing a member
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10
In the appropriation section interest on drawings is added to net profit. True or False?
True
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10
Is interest on capital added or subtracted from undistributed profits in the appropriation account?
Subtracted
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10
Interest on capital is found on the debit side of the current account. True or False?
False - This is found on the credit side
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10
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10
How are profits and losses shared in a partnership?
According to a profit and loss sharing ratio determined by the partnership
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10
What is a partnership deed and why may it be helpful to have one created?
Partnership deed is a formal contractual agreement among all partners to agree to terms and conditions of a partnership and it helps to resolve potential issues
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10
Give any 2 reasons why someone would pay for goodwill
1) Good employees may come with the business, 2) Having a good location , 3) Customer loyalty, 4) Business has a good reputation