Salaries will be found on the credit side of the current account. True or False?
True
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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
What are 2 advantages of a partnership business?
More capital can be raised with additional partners or partners can help bring extra skills or responsibility is shared
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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
What does an appropriation account do?
refers to a breakdown of how a firm's profits are divided up i.e how owners of a business split losses and profits
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10
Name one method of calculating goodwill
1) Average sales method, 2) Annual Fees Method , 3) Super profits method
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lifesaver
Give 25 points!
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seesaw
Swap points!
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fairy
Take points!
5
10
15
20
25
banana
Go to last place!
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10
On a partners current account drawings and interest on drawings are found on the debit side of the account. Is this True or False?
True
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10
What does a debit amount mean on a current account?
This means a partner has taken out more than their share of profits than they were entitled to
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seesaw
Swap points!
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rocket
Go to first place!
Okay!
fairy
Take points!
5
10
15
20
25
baam
Lose 20 points!
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10
What does interest on capital mean?
if the partnerโs capital is unequal to the profit-sharing ratio, this is used to compensate for partners who invested more capital than others
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10
What does interest on drawings mean?
To deter the partners from taking out cash unnecessarily, the concept can be used of charging the partners interest on each drawing or withdrawal
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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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10
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?