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JAMB Principles of Accounts 1995 Question 37

Question 37

Partnership Accounts

Halidu and Hamed are business partners with ₦30 000 and ₦20 000 capital respectively. At the end of the financial year, a profit of ₦12 000, which included Halidu's salary of ₦3 000, was made.
Hamed's share of the profit should be

  1. A.credited to partners' capital account
  2. B.credited to partners' current account
  3. C.credited to appropriation account
  4. D.debited to partners' drawings account.
Show the answer and explanation

Answer: B (credited to partners' current account)

Explanation

Where capitals are fixed, each partner's share of profit is credited to his current account.