Commerce Accountancy · Quantitative Aptitude

Partnership Accounting

170 Questions

Partnership accounting involves calculating profit and loss sharing ratios among business partners. It covers topics like interest on capital, joint life policies, and capital balances. These questions are a staple in commerce exams and test core accountancy principles.

Profit sharing ratiosInterest on capitalJoint venture accountingCapital balance calculationsPartner retirement policies

Partnership Accounting Questions

Multiple choice general knowledge math & puzzles

A starts business with a capital of Rs.1000. B and C join with some investments after 3 and 6 months respectively. If at the end of a year, the profit is divided in the ratio 2:3:5. What is B's investment in the business?

  1. 1600

  2. 2000

  3. 1750

  4. 2350

  5. None
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Using partnership profit-sharing principles, profit is distributed in proportion to capital × time. For A: 1000 × 12 = 12000. Given ratio 2:3:5, the common ratio k = 12000/2 = 6000. Then B's investment × 9 months = 3k = 18000, so B's investment = 18000/9 = Rs. 2000. C's investment would be 5k/6 = 5000. This is a standard time-weighted partnership problem.

Multiple choice general knowledge math & puzzles

A and B started a partnership business investing some amount in the ratio of 3 : 5. C joined then after six months with an amount equal to that of B. In what proportion should the profit at the end of one year be distributed among A, B and C?

  1. 6:10:3

  2. 6:7:8

  3. 6:10:5

  4. Data inadequate
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A and B invest for 12 months in ratio 3:5. C invests 5 units for 6 months. Ratio of profit = (3*12) : (5*12) : (5*6) = 36 : 60 : 30. Dividing by 6 gives 6 : 10 : 5.

Multiple choice general knowledge math & puzzles

A, B and C enter into a partnership. In advance, A gives Rs 1000 for 4 months. B gives Rs 1500 for 8 months and C gives Rs 2000 for 10 months. They gain Rs 585 altogether. Find the share of profit each?

  1. 60,205,320

  2. 65,195,325

  3. 70,185,330

  4. 75,185,325
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Profit sharing ratio is based on investment × time. A: 1000×4=4000, B: 1500×8=12000, C: 2000×10=20000. Total = 36000. A's share = (4000/36000)×585 = 65, B's share = (12000/36000)×585 = 195, C's share = (20000/36000)×585 = 325.

Multiple choice general knowledge math & puzzles

Three partners A, B and C invest Rs 1600, Rs 1800 and Rs 2300 respectively in a business. How should they divide a profit of Rs 399?

  1. 116, 130, 153

  2. 112, 126, 161

  3. 110, 120, 169

  4. 113, 127, 159
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Profit is divided in investment ratio 1600:1800:2300 = 16:18:23. Total parts = 57. A's share = (16/57)×399 = 112, B's share = (18/57)×399 = 126, C's share = (23/57)×399 = 161. Verify: 112+126+161 = 399.

Multiple choice general knowledge math & puzzles

P,Q, R enter a partnership where they invest Rs. 20000, Rs. 30000, Rs. 40000 resp. P withdraws Rs. 10000 after 2 months, Q withdraws Rs. 15000 after 4 months and R withdraws Rs. 25000 after 8 months. What will be R’s share in the profit of Rs. 12474?

  1. 3564

  2. 3267

  3. 5643

  4. 5500
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Calculate each partner's investment × time: P invests 20000 for 2 months, then 10000 for remaining 10 months = 20000×2 + 10000×10 = 140000. Q invests 30000 for 4 months, then 15000 for 8 months = 30000×4 + 15000×8 = 240000. R invests 40000 for 8 months, then 15000 for 4 months = 40000×8 + 15000×4 = 380000. Total = 760000. R's share = (380000/760000) × 12474 = 5643.

Multiple choice general knowledge math & puzzles

Two traders, Chetan and Michael, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs.100, while at the end of the fifth day it was priced at Rs.110. At the end of each day, the MCS share price either went up by Rs.10, or else, it came down by Rs.10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both below are some additional facts about how Chetan and Michael traded over the five trading days. ? Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price. ? If on any day, the closing price was above Rs.110, then Michael sold 10 shares of MCS, while if it was below Rs.90, he bought 10 shares, all at the closing price. 1. If Chetan sold 10 shares of MCS on three consecutive days, while Michael sold 10 shares only once during the five days, what was the price of MCS at the end of day 3?

  1. 90

  2. 100

  3. 110

  4. 120
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

If Chetan sold shares on three consecutive days, the price must have gone up on three consecutive days. Since Michael only sold shares once (which happens only when the price goes above 110, i.e., reaches 120), the price path must rise steadily. This sequence of consecutive up days means the price at the end of day 3 must be 110.

Multiple choice general knowledge math & puzzles

Two traders, Chetan and Michael, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs.100, while at the end of the fifth day it was priced at Rs.110. At the end of each day, the MCS share price either went up by Rs.10, or else, it came down by Rs.10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both below are some additional facts about how Chetan and Michael traded over the five trading days. ? Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price. ? If on any day, the closing price was above Rs.110, then Michael sold 10 shares of MCS, while if it was below Rs.90, he bought 10 shares, all at the closing price. If Chetan ended up with Rs.1300 more cash than Michael at the end of day 5, what was the price of the MCS share at the end of day 4?

  1. Rs. 90

  2. Rs. 100

  3. Rs. 110

  4. Rs. 120
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The price sequence that results in Chetan having exactly Rs.1300 more than Michael is: Day 1 (Rs.90), Day 2 (Rs.80), Day 3 (Rs.90), Day 4 (Rs.100), Day 5 (Rs.110). Chetan's strategy of buying when prices fall and selling when they rise gives him better returns compared to Michael who only trades at extreme prices. At day 4's Rs.100 price, both traders are in a neutral position relative to their strategies, setting up the final difference.

Multiple choice general knowledge math & puzzles

Two traders, Chetan and Michael, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs.100, while at the end of the fifth day it was priced at Rs.110. At the end of each day, the MCS share price either went up by Rs.10, or else, it came down by Rs.10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both below are some additional facts about how Chetan and Michael traded over the five trading days. ? Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price. ? If on any day, the closing price was above Rs.110, then Michael sold 10 shares of MCS, while if it was below Rs.90, he bought 10 shares, all at the closing price. If Michael ended up with 20 more shares than Chetan at the end of days 5, what was the price of the shares at the and of day 3?

  1. 90

  2. 100

  3. 110

  4. 120
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

For Michael to end up with 20 more shares than Chetan, we analyze the possible price paths. Chetan always ends up with 10 fewer shares than his starting amount. Thus, Michael must end up with 10 more shares than his starting amount. This is only possible if Michael bought shares when the price went below 90 (i.e., reached 80). The only path satisfying this and ending at 110 on day 5 requires the price at the end of day 3 to be 90.

Multiple choice general knowledge math & puzzles

Two traders, Chetan and Michael, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs.100, while at the end of the fifth day it was priced at Rs.110. At the end of each day, the MCS share price either went up by Rs.10, or else, it came down by Rs.10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both below are some additional facts about how Chetan and Michael traded over the five trading days. ? Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price. ? If on any day, the closing price was above Rs.110, then Michael sold 10 shares of MCS, while if it was below Rs.90, he bought 10 shares, all at the closing price. If Michael ended up with Rs.100 less cash than Chetan at the end of day 5, what was the difference in the number of shares possessed by Michael and Chetan (at the end of day 5)?

  1. Michael had 10 less shares than Chetan.

  2. Michael had 10 more shares than Chetan.

  3. Chetan had 10 more shares than Michael.

  4. Both had the same number of shares.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Let $U$ be the number of days the price went up and $D$ be the number of days it went down. Since the price went from 100 to 110 over 5 days with steps of $\pm 10$, we have $U + D = 5$ and $10(U - D) = 10$, which yields $U = 3$ and $D = 2$. Chetan sells 10 shares on up days and buys 10 on down days, ending with $30 - 20 = 10$ fewer shares. Michael only trades if the price goes above 110 or below 90. Analyzing the valid price paths shows that Michael's cash difference of -100 relative to Chetan forces both to end up with the same number of shares.

Multiple choice general knowledge math & puzzles

Two traders, Chetan and Michael, were involved in the buying and selling of MCS shares over five trading days. At the beginning of the first day, the MCS share was priced at Rs.100, while at the end of the fifth day it was priced at Rs.110. At the end of each day, the MCS share price either went up by Rs.10, or else, it came down by Rs.10. Both Chetan and Michael took buying and selling decisions at the end of each trading day. The beginning price of MCS share on a given day was the same as the ending price of the previous day. Chetan and Michael started with the same number of shares and amount of cash, and had enough of both below are some additional facts about how Chetan and Michael traded over the five trading days. ? Each day if the price went up, Chetan sold 10 shares of MCS at the closing price. On the other hand, each day if the price went down, he bought 10 shares at the closing price. ? If on any day, the closing price was above Rs.110, then Michael sold 10 shares of MCS, while if it was below Rs.90, he bought 10 shares, all at the closing price. What could have been the maximum possible increase in combined cash balance of Chetan and Michael at the end of the fifth day?

  1. 3700

  2. 4000

  3. 4700

  4. 5000
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The maximum combined cash increase of Rs.5000 occurs with the price sequence: 100→90→80→90→100→110. Chetan's more active strategy (buying at Rs.80, Rs.90; selling at Rs.100, Rs.110) generates better returns than Michael's threshold-based approach. The key is maximizing price volatility while ensuring the sequence ends at Rs.110, allowing both traders to profit optimally from their respective strategies.

Multiple choice general knowledge

Investment income ratio is calculated by dividing net investment income by:

  1. Written premium

  2. Earned premium

  3. Unearned Premium

  4. Total investment income
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Investment income ratio measures investment efficiency relative to premium earned during the period. It uses earned premium (B) because this represents revenue recognized for coverage provided, matching the timing of investment income. Written premium (A) is policy sales regardless of period, unearned premium (C) is deferred revenue, and total investment income (D) would make the ratio meaningless.

Multiple choice general knowledge math & puzzles

Mr Sumit, Mr Punit and Mr Sanjay are partners in a business. Mr Sumit started the business with Rs 40,000. After 3 months, Mr Sanjay and Punit joined him with Rs 60,000 each. If the total profits at the end of the year amount to Rs 31,200, what would be Sanjay share in it?

  1. 15600

  2. 9600

  3. 10800

  4. 21600
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Profit ratio based on investment × time. Sumit: 40000 × 12 = 480000. Sanjay and Punit: 60000 × 9 = 540000 each. Total ratio units = 480000 + 540000 + 540000 = 1560000. Sanjay's share = (540000/1560000) × 31200 = 10800.

Multiple choice

Opening capital Rs. 20, 000, closing capital Rs. 10, 000, profit during the year Rs. 5, 000. Additional capital introduced Rs. 1, 000, Drawing will be

  1. Rs. 16, 000

  2. Rs. 18, 000

  3. Rs. 23, 000

  4. Rs. 25, 000
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The capital equation is: Closing Capital = Opening Capital + Profit - Drawings + Additional Capital. Therefore: 10,000 = 20,000 + 5,000 - Drawings + 1,000. Solving: Drawings = 20,000 + 5,000 + 1,000 - 10,000 = 16,000. Option B is miscalculated, option C adds instead of subtracts, option D is incorrect.