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Class 12AccountancyPartnership Accounts - Basic ConceptsCapital AccountsEasy
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In a partnership, how is a partner's share of profit shown in the partner's account?

Answer and explanation

Correct answer: It is credited

A partner’s share of profit increases the partner’s claim on the firm (capital/current account), so it is recorded as a credit to the partner’s account. Option B is incorrect because a debit entry is used for losses or withdrawals, not for profits. Options C and D are also wrong: profits must be accounted for (not ignored) and are shown in the partner’s account, not automatically recorded as a bank deposit. Exam tip: remember the rule — profit results in a credit to the partner’s account; loss results in a debit.

Related tags

Partnership AccountsShare Of ProfitCapital AccountCredit EntryAccounting BasicsCapital AccountsPartnership Accounts Basic ConceptsAccountancy
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10 more MCQs
  1. 1If the deed gives ten percent interest on capital and capital was introduced after six months, what is necessary in calculation?
  2. 2If a partner pays personal expenses through the firm and the deed does not allow it, how is it generally treated?
  3. 3A deed states that capitals will be fixed. In such a case, where are additional capital and drawings generally recorded?
  4. 4The deed requires equal capitals but at year end one partner's capital is short. An entry to bring the shortage will affect which account?
  5. 5What does a partners capital account mainly show?
  6. 6For whom are capital accounts generally prepared in partnership?
  7. 7Under fixed capital method which change is generally recorded in the capital account?
  8. 8Under fluctuating capital method where is share of profit credited?
  9. 9Under the fixed capital method, to which account is a partner’s salary credited?
  10. 10Under the fluctuating capital method, drawings are debited to which account?
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