Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

Calculate the amount of A's Commission from the following items

Net profit before commission ₹1,65,000 and Mr. A is entitled for a commission of 10% of net profit after charging such commission.

Options:

₹16,500

₹15,000

₹16,000

₹15,500

Correct Answer:

₹15,000

Explanation:

The correct answer is Option 2- ₹15,000

Commission = Net profit before commission x Rate of commission/ (100 + rate of commission)

Net profit before commission = ₹1,65,000
Commission rate = 10%

Commission = 1,65,000 x 10/(100+10)
                    = 16,50,000/110
                    = 15,000