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A receives a commission of 10% on profit before commission, while B receives a commission of 10% on profit after commission. If the profit before commission is ₹1,21,000, what is A's commission?

Answer and explanation

Correct answer: ₹12,100

A's commission is calculated directly on the profit before commission: \(₹1,21,000 \times 10\% = ₹12,100\). B's commission is based on the profit after commission and does not affect the amount of A's commission in this question. Exam tip: When commission is stated to be on profit before commission, apply the given percentage directly to that profit.

Related tags

Partnership AccountsAdjustmentsCommissionProfit Before CommissionProfit SharingPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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