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WAEC Financial Accounting 2016 Question 30

Question 30

Partnership Accounts

Where fixed capitals are maintained in a partnership, share of profits are

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

Answer: B (credited to partners current accounts.)

Explanation

With fixed capitals, all profit shares, salaries and interest go to the partners' current accounts (credit).