Partnership Accounting | Baamboozle - Baamboozle

What does a debit amount mean on a current account?

This means a partner has taken out more than their share of profits than they were entitled to

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Interest on capital is found on the debit side of the current account. True or False?

False - This is found on the credit side

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On a partners current account drawings and interest on drawings are found on the debit side of the account. Is this True or False?

True

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trap

No points!

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fairy

Take points!

fairy

Take points!

thief

Give points!

What does an appropriation account do?

refers to a breakdown of how a firm's profits are divided up i.e how owners of a business split losses and profits

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lifesaver

Give 25 points!

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shark

Other team loses 5 points!

Okay!

gift

Win 25 points!

Okay!

banana

Go to last place!

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Net profit before any distributions were $10,000 and a partner had to get a salary of $1500 also he was charged drawing of $2000 how much profits will remain after calculations?

12,000 - 1500 = 10,500

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In the appropriation section interest on drawings is added to net profit. True or False?

True

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Define goodwill

Goodwill is an intangible asset that accounts for the excess purchase price of another company.

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Give any 2 reasons why someone would pay for goodwill

1) Good employees may come with the business, 2) Having a good location , 3) Customer loyalty, 4) Business has a good reputation

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Why would a partnership admit a new partner?

Need of more capital, need for new skills or for the purpose of replacing a member

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Is interest on capital added or subtracted from undistributed profits in the appropriation account?

Subtracted

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Define a partnership business

A partnership is a business that has 2 to 20 owners who all work together with the main aim of making profits and also who shares these profits/losses

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