Partnerships — Paper 1 · IGCSE Accounting (9-1) 0985

23 Rajid and Sunil formed a partnership on 1 January 2019 but did not prepare a partnership agreement. They provided the following information. Rajid Sunil capital introduced 1 January 2019 $40 000 $20 000 during the year ended 31 December 2019 drawings $5 000 $3 500 share of work 50% 50% They decided to draw up a partnership agreement for future years. Which item would be most beneficial to Rajid in 2020? A interest on capital B interest on drawings C limit on annual drawings D partnership salaries

1 marks

Answer: A

This question in 0985/11 May/June 2020

24 Harry and Jane are in partnership. The following information relates to Harry for the financial year. $ salary 8000 drawings 2800 share of profit 4600 The opening credit balance on Harry’s current account was $28 200. What was the closing balance on his current account? A $30 000 B $38 000 C $40 800 D $43 600

1 marks

Answer: B

This question in 0985/11 May/June 2020

22 Rajid and Sunil formed a partnership on 1 January 2019 but did not prepare a partnership agreement. They provided the following information. Rajid Sunil capital introduced 1 January 2019 $40 000 $20 000 during the year ended 31 December 2019 drawings $5 000 $3 500 share of work 50% 50% They decided to draw up a partnership agreement for future years. Which item would be most beneficial to Rajid in 2020? A interest on capital B interest on drawings C limit on annual drawings D partnership salaries

1 marks

Answer: A

This question in 0985/12 May/June 2020

23 Harry and Jane are in partnership. The following information relates to Harry for the financial year. $ salary 8000 drawings 2800 share of profit 4600 The opening credit balance on Harry’s current account was $28 200. What was the closing balance on his current account? A $30 000 B $38 000 C $40 800 D $43 600

1 marks

Answer: B

This question in 0985/12 May/June 2020

22 In addition to a share of the profit a partner receives interest on capital, a salary and is charged interest on drawings. How are these recorded in the ledger accounts of the partner? interest on capital salary interest on drawings A credit capital account credit current account debit capital account B credit current account debit capital account credit current account C credit current account credit current account debit current account D debit current account debit current account credit current account

1 marks

Answer: C

This question in 0985/12 Oct/Nov 2020

25 What is an advantage of forming a partnership? A Decisions have to be recognised by all partners. B Each partner is responsible for actions of other partners. C Profits have to be shared among the partners. D Responsibilities can be shared between the partners.

1 marks

Answer: D

This question in 0985/12 May/June 2021

26 Ann and Ben are in partnership sharing profits and losses equally. They provided the following information for the year ended 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 was Ben’s share of the residual profit? A $5500 B $10 000 C $13 000 D $14 500

1 marks

Answer: A

This question in 0985/12 May/June 2021

21 Hassin found that he needed help to run his business. He decided to take a partner rather than employ an assistant. Why did he decide to take a partner? 1 An assistant would not interfere with how the shop was run. 2 An assistant would not share risk. 3 A partner would introduce some additional capital. 4 A partner would take a share of the profit. A 1 and 3 B 1 and 4 C 2 and 3 D 2 and 4

1 marks

Answer: C

This question in 0985/12 Oct/Nov 2021

22 Anwar is a sole trader making annual profits of $24 000. He decides to admit Dilip as a partner. They agree that Anwar would receive a salary, and profits and losses would be shared equally. The forecast appropriation account for the partnership’s first year of trading is: $ profit for the year 50 000 salary Anwar 10 000 profit available for distribution 40 000 By how much will Anwar’s total income increase? A $1000 B $6000 C $16 000 D $26 000

1 marks

Answer: B

This question in 0985/12 Oct/Nov 2021

23 What is the purpose of preparing a partnership appropriation account? A to calculate the interest to be charged on the drawings made by each partner B to calculate the interest to be paid on the capital invested by each partner C to show the amount of salary to which each partner is entitled D to show the division of the profit or loss for the year between the partners

1 marks

Answer: D

This question in 0985/11 May/June 2022

24 Raj and Seema are in partnership sharing profits and losses 2 : 1. Raj withdrew $5000 during the year and was charged interest at 3%. Seema did not make any withdrawals during the year. The profit for the year was $30 000. How much was credited to Raj’s current account at the end of the year? A $19 850 B $19 900 C $20 000 D $20 100

1 marks

Answer: D

This question in 0985/11 May/June 2022

18 Which item would not appear in the appropriation account of a partnership? A interest charged on partners’ drawings B interest paid on loans from partners C interest paid on partners’ capital D salaries paid to partners

1 marks

Answer: B

This question in 0985/12 May/June 2022

19 Carol and Denise are in partnership sharing profits and losses in the ratio 2 : 1. Denise’s current account balances were as follows. at 1 May 2021 $2000 debit at 1 May 2022 $7000 credit She had made no drawings during the year. What was the total profit made by the partnership in the year ended 30 April 2022? A $9000 B $15 000 C $18 000 D $27 000

1 marks

Answer: D

This question in 0985/12 May/June 2022

23 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 A 1, 2 and 3 B 1 and 4 C 2 and 3 only D 4 only

1 marks

Answer: B

This question in 0985/11 May/June 2023

24 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? A $10 875 B $13 875 C $18 125 D $23 125

1 marks

Answer: B

This question in 0985/11 May/June 2023

23 Which item is added to the profit for the year in a partnership appropriation account? A interest on capital B interest on drawings C partners’ drawings D partners’ salaries

1 marks

Answer: B

This question in 0985/12 May/June 2023

24 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? A $400 B $3200 C $6400 D $9200

1 marks

Answer: C

This question in 0985/12 May/June 2023

22 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? A $12 000 B $15 000 C $22 000 D $25 000

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2023

23 A partner is charged interest on the drawings he made during a financial year. How is this recorded in the partner’s accounts? A credit the partner’s capital account B credit the partner’s current account C debit the partner’s capital account D debit the partner’s current account

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2023

22 What is shown in a partnership appropriation account? A the capital contributed by each partner B the distribution of profit/loss among the partners C the partners’ current account balances D the interest on a partner’s loan account

1 marks

Answer: B

This question in 0985/11 May/June 2024

23 Rajid and Sunil formed a partnership on 1 January 2019 but did not prepare a partnership agreement. They provided the following information. Rajid Sunil capital introduced 1 January 2019 $40000 $20000 during the year ended 31 December 2019 drawings $5000 $3500 share of work 50% 50% They decided to draw up a partnership agreement for future years. Which item would be most beneficial to Rajid in 2020? A interest on capital B interest on drawings C limit on annual drawings D partnership salaries

1 marks

Answer: A

This question in 0985/11 May/June 2024

22 Where is interest on drawings entered in the accounting records of a partnership business? appropriation partner’s capital partner's current account account account A debit no entry credit B credit no entry debit C debit credit no entry D credit debit no entry

1 marks

Answer: B

This question in 0985/12 May/June 2024

22 What is an advantage to a trader of forming a partnership? A continuity of existence B decision making is quicker C profits are shared D risks are shared

1 marks

Answer: D

This question in 0985/12 Oct/Nov 2024

23 Which items should be entered in the appropriation account of a partnership? interest on interest on partners’ partners’ partners’ drawings drawings loans A ✓ B ✓ ✓ C ✓ ✓ D ✓ ✓

1 marks

Answer: A

This question in 0985/12 Oct/Nov 2024

22 What is an advantage to a sole trader of forming a partnership? A Decisions are always acted on immediately. B Decisions are taken by the directors. C Partners share profits and losses. D Partners share the responsibilities.

1 marks

Answer: D

This question in 0985/11 May/June 2025

23 Which statements are correct in relation to the financial statements of a partnership? 1 Interest on partners’ capital is shown as an expense in the income statement. 2 Interest on partners’ drawings is added to the profit for the year in the appropriation account. 3 Partners’ current account balances are shown in the statement of financial position. 4 Partners’ salaries are shown as an expense in the income statement. A 1 and 2 B 2 and 3 C 2 and 4 D 3 and 4

1 marks

Answer: B

This question in 0985/11 May/June 2025

22 Ann and Bob are in partnership and share profits in the ratio 3 : 2 respectively. Ann is entitled to a salary of $20 000 per annum. There is no interest on capital or interest on drawings. The profit for the year is $75 000. Ann’s share of the residual profit was $24 000. What salary was Bob entitled to? A $13333 B $15000 C $16000 D $31000

1 marks

Answer: B

This question in 0985/12 May/June 2025