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The deed says B will get ten percent commission on net profit before commission. If profit before commission is ninety thousand rupees, what is B's commission?

Answer and explanation

Correct answer: Nine thousand rupees

The governing concept is identifying the correct profit base before applying the commission percentage. The question explicitly states that B receives 10% of net profit before commission and that profit before commission is ₹90,000. Therefore the calculation is: Commission = 10/100 × ₹90,000 = ₹9,000. Option A is correct. The alternative formula ₹90,000 × 10/110, which gives approximately ₹8,182, is used when commission is calculated on profit after charging that commission; that is not the condition here. ₹10,000 uses an unsupported amount, while ₹90,000 is the entire profit rather than the commission. Thus only option A follows the stated deed.

Related tags

Partner CommissionBefore CommissionNumerical CalculationPartnership DeedPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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