WAEC Accounting Past Questions & Answers - Page 93

463.

In the absence of a partnership agreement, additional capital contributions by partners attract interest of

A.

5%

B.

10%

C.

12%

D.

15%

Correct answer is A

In the Absent of  an agreement, the partners will share profits and losses equally. If an agreement exists, partners divide profits based on the terms specified. Any reason can be used as the basis for establishing a profit-sharing ratio, but the two main factors are responsibility and capital contributions. Additional capital contributed attracts a 5% interest in the absence of a partnership agreement


 

465.

Where fixed capitals are maintained in a partnership, share profits are

A.

Credited to partners capital accounts

B.

Credited to partners current accounts

C.

Debited to partners capital accounts

D.

Debited to partners current accounts

Correct answer is B

Each partner has a separate current account and includes;

• The credit side of the current account shows all the profits of the partners

• The credit side of the current account shows all the profits of the partner such as salary, interest on capital and the share of residue profits.