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If A and B share profits equally (1:1) and an omitted income of four thousand rupees is discovered, how much will be credited to A?

Answer and explanation

Correct answer: Two thousand rupees

Omitted income increases the firm’s profit and must be shared between partners according to the profit-sharing ratio. Since A and B share equally (1:1), A’s share = ₹4,000 × 1/2 = ₹2,000. The closest distractor (₹4,000) is wrong because the entire amount is not credited to one partner; ₹1,000 would imply a different ratio and ₹0 is incorrect because omitted income is distributable profit. Exam tip: always divide the discovered profit by the profit-sharing ratio to find each partner’s credit.

Related tags

Omitted IncomePartnership AccountsEqual SharingAdjustmentsNumericalPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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