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If total profit is ₹80,000 and the reserve fund is ₹16,000, what is the distributable profit?

Answer and explanation

Correct answer: Sixty-four thousand rupees

Distributable profit = total profit − reserve. So ₹80,000 − ₹16,000 = ₹64,000, hence option A is correct. Option B (₹96,000) is incorrect because it adds the reserve instead of subtracting it; option C is just the reserve amount, not the distributable profit; option D is the original profit without deducting the reserve. Exam tip: Always deduct reserves and appropriations from profit before calculating amounts available for distribution among partners.

Related tags

ReserveDistributable ProfitNumericalPartnership AccountsProfit DistributionPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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