Accounting Multiple Choice Question – 23 September 2022

Alex & Lucy are partners in a business and share profits in the ratio of 3:1

Their net profit for this financial year is £80 000.

The following accounting information is also available:

• Alex – interest on capital is £3,000 & interest on drawings is £500
• Lucy – interest on capital is £2,500 & interest on drawings is £1,000

How will the residual net profit be shared?

Select ONE answer:

1. Alex £57,000 & Lucy £19,000
2. Alex £58,875 & Lucy £21,125
3. Alex £59,500 & Lucy £20,500
4. Alex £60,500 & Lucy £19,500

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 1

1. Correct – £80,000 – £3,000 – £2,500 + £500 + £1,000 = £76,000 = = > Divide by 4 then multiply by 3 for Alex’s share
2. Not correct
3. Not correct
4. Not correct

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