These twelve questions cover profit sharing, interest on capital and drawings, partner salary, current accounts, partners’ funds and reconciliation. They are original, use fictional businesses and run from easier to harder. All amounts are in RM.
Cover the answer, write your working on paper, then open the answer and compare each step. Use the ledger trainer to check debits and credits, the percentage-base explorer for interest, and record any slip in the mistake log so you can retest it later.
Warm-up questions
1. Net profit of RM72,000 is shared by Amir, Bee and Cheng in the ratio 4:3:2. Find each share.
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Parts = 4 + 3 + 2 = 9. One part = RM72,000 ÷ 9 = RM8,000.
Amir 4 × 8,000 = RM32,000. Bee 3 × 8,000 = RM24,000. Cheng 2 × 8,000 = RM16,000.
Check: 32,000 + 24,000 + 16,000 = 72,000.
2. A loss of RM18,000 is shared by Dewi and Eng in the ratio 5:1. How much does each partner bear?
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Parts = 6. One part = RM18,000 ÷ 6 = RM3,000.
Dewi RM15,000, Eng RM3,000. Check: 15,000 + 3,000 = 18,000. Each amount is debited to the partner’s current account.
3. The partnership agreement of Kasih Bakery pays 6% interest on capital. Dina’s capital is RM90,000 and Edwin’s is RM60,000. Calculate each partner’s interest.
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Dina: 90,000 × 6% = RM5,400. Edwin: 60,000 × 6% = RM3,600.
Total RM9,000, debited to appropriation and credited to the partners’ current accounts.
4. At Laut Biru Café the agreement charges 8% a year on drawings. Farid drew RM1,500 on 1 July and RM1,500 on 1 October. The year ends on 31 December. Calculate the interest.
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1 July: 6 months. 1,500 × 8% × 6/12 = 120 × 1/2 = RM60.
1 October: 3 months. 1,500 × 8% × 3/12 = 120 × 1/4 = RM30.
Interest on drawings RM90. Debit Farid’s current account RM90 and credit appropriation RM90.
5. For each item, say which side of the appropriation account it is on (or that it is not in it) and which side of the partner’s current account it is on: (a) salary, (b) interest on capital, (c) interest on drawings, (d) cash taken by a partner for personal use, with fixed capital.
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(a) Salary: debit side of the appropriation account; credit the current account.
(b) Interest on capital: debit side of the appropriation account; credit the current account.
(c) Interest on drawings: credit side of the appropriation account; debit the current account.
(d) Cash taken: not in the appropriation account, because it is drawings; debit the current account.
Core questions
6. Gina and Hock share profits equally. Gina’s salary is RM18,000. Net profit is RM15,000. Show the totals for each partner.
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Residual = 15,000 − 18,000 = −RM3,000, so a loss of RM3,000 shared equally: RM1,500 each.
Gina: 18,000 − 1,500 = RM16,500. Hock: −RM1,500, a debit.
Check: 16,500 − 1,500 = 15,000, the net profit.
7. Kasih Bakery’s partners are Dina and Edwin (capitals in Question 3). Net profit is RM66,000. Dina has a salary of RM9,000. Interest on capital is 6%. Interest on drawings is Dina RM400 and Edwin RM600. The rest is shared Dina 5 : Edwin 3. Prepare the appropriation account and each partner’s total.
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| Appropriation account | RM |
|---|---|
| Net profit | 66,000 |
| Interest on drawings: Dina 400, Edwin 600 | 1,000 |
| Profit available | 67,000 |
| Salary: Dina | (9,000) |
| Interest on capital (5,400 + 3,600) | (9,000) |
| Residual profit | 49,000 |
| Share: Dina (5/8) | 30,625 |
| Share: Edwin (3/8) | 18,375 |
One part = 49,000 ÷ 8 = 6,125. Dina 5 × 6,125 = 30,625. Edwin 3 × 6,125 = 18,375.
Dina total: 9,000 + 5,400 + 30,625 − 400 = RM44,625. Edwin: 3,600 + 18,375 − 600 = RM21,375.
Check: 44,625 + 21,375 = 66,000.
8. Kasih Bakery’s capitals are fixed. Opening current accounts: Dina RM2,000 credit, Edwin RM1,500 debit. Drawings: Dina RM40,000, Edwin RM24,000. Using Question 7, prepare the closing current account balances.
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Dina: 2,000 + 9,000 + 5,400 + 30,625 − 40,000 − 400 = RM6,625 credit.
Edwin: −1,500 + 3,600 + 18,375 − 24,000 − 600 = RM4,125 debit.
Check by another route: Dina 2,000 + 44,625 − 40,000 = 6,625. Edwin −1,500 + 21,375 − 24,000 = −4,125.
9. Using Question 8, show partners’ funds on the balance sheet.
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Capital: 90,000 + 60,000 = RM150,000.
Current accounts: Dina RM6,625 added, Edwin RM4,125 deducted, net RM2,500.
Partners’ funds = RM152,500. Check: 150,000 + 6,625 − 4,125 = 152,500.
Stretch questions
10. Reconcile the closing balances in Question 8 using opening balances, net profit and drawings.
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Opening combined = 2,000 − 1,500 = RM500 credit.
Expected closing = 500 + 66,000 − (40,000 + 24,000) = 500 + 66,000 − 64,000 = RM2,500.
Computed closing = 6,625 − 4,125 = RM2,500. They agree.
11. A student reports Kasih Bakery’s closing balances as Dina RM6,625 credit and Edwin RM4,125 credit. Is this reconcilable? What has gone wrong?
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Combined computed = 6,625 + 4,125 = RM10,750. Expected = RM2,500 (from Question 10). Difference = 10,750 − 2,500 = RM8,250.
8,250 = 2 × 4,125, so Edwin’s balance has the wrong sign: it should be a debit of RM4,125. The correct combined is 6,625 − 4,125 = 2,500.
12. Explain in one or two sentences why a partnership might charge interest on drawings, and why it is not an expense.
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It makes partners who withdraw money earlier bear a cost, which keeps drawings fair between them. It is not an expense because it is charged to the partners and added to the profit available to share, so it only moves profit between partners.
If you got these wrong
Use the table to decide which lesson to revisit.
| Error | Where to look |
|---|---|
| Wrong shares from a ratio, or a share bigger than the profit (Questions 1, 2) | Allocate profit under a supplied agreement |
| Posted drawings to capital, or confused fixed and current accounts (Questions 5, 8, 9) | Distinguish capital and current accounts |
| Salary treated as an expense, or added on top of the shares (Questions 6, 7) | Treat partner salary as appropriation |
| Interest on drawings credited to the partner, or wrong months (Questions 4, 12) | Record interest on drawings |
| Totals do not agree, or a debit added as a credit (Questions 10, 11) | Reconcile partners’ balances |
| Interest on capital percentage on the wrong base (Question 3) | Percentage-base explorer |
Return to the partnership accounting module for the full study order. If errors keep repeating even after you reread the lessons, our teachers can review your working in online one-to-one Accounting tuition.