Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Partnership

Question:

If the divisible profit is ₹5,000 and there is a commission to the manager of ₹2,000, then how much profit is distributed between partners?

Options:

₹5,000

₹2,000

₹3,000

Any of the above

Correct Answer:

₹5,000

Explanation:

The correct answer is option 1- ₹5,000.

₹5,000 is distributed between partners because it is the divisible profit. The manager's commission is charged against profit and already charged to the profit and loss account. The divisible profit comes from the profit and loss appropriation account which is distributed between partners directly.