O-LevelAccountingAnalysis and interpretation7707/11 · May/June 2011 · Q201 Mark

Rajid and Sunil formed a partnership on 1 January 2010 but did not prepare a partnership agreement. They provided the following information. capital introduced 1 January 2010 Rajid $40 000 Sunil $20 000 during the year ended 31 December 2010 drawings $5 000 $3 500 share of work 50% 50% They decide to draw up a partnership agreement for future years. Which of the following adjustments to the partnership agreement would be most beneficial to Rajid in 2010?

Ainterest on capital

Binterest on drawings

Climit on annual drawings

Dpartnership salaries

✓ Correct answer

A: interest on capital

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Topic: Analysis and interpretation, O-Level Accounting (syllabus 7707). Multiple choice, 1 mark.
Source: O-Level Accounting, May/June 2011 Paper 1 Variant 1, question 20.

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