Accounting Multiple Choice Question – 15 April 2020

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

John and Mary, the only two partners in a firm, invested capital of £40,000 and £60,000 respectively and agreed their entitlements to be:

  • John = Annual salary: £14,000; Interest on capital (per annum): 10%; Share of remaining profit or loss: 40%
  • Mary = Annual salary: £20,000; Interest on capital (per annum): 10%; Share of remaining profit or loss: 60%

If the profit for the year was £80,000, how much, in total, would John be entitled to receive?

Select ONE answer:

  1. £14,400
  2. £18,000
  3. £21,600
  4. £32,400

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

  1. Not correct
  2. Not correct
  3. Not correct
  4. Correct
  • Profit for the year £80,000
  • John & Mary
  • Salary: £14,000 & £20,000 = £34,000
  • Interest on capital (10%): £4,000 & £6,000 =£10,000
  • Profit remaining: £36,000
  • Share of profit (40% : 60%): £14,400 & £21,600 £36,000
  • Totals receivable: £32,400 & £47,600 = £80,000

 

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