Louise and Thelma are in partnership sharing residual profits and losses 50:50. The profit for the year is $96 000. Thelma is entitled to a salary of $40 000 per annum (to be paid by means of a book entry). The amount credited to Thelma's retained earnings account after the final distribution of profits is:

Select one:

a.$28 000

b.$88 000

c.$48 000

d.$68 000

A capitalisation ratio of 2:1 compared to 2.5:1 means:

Select one:

a.a lower level of gearing.

b.a greater dependency on debt.

c.a lesser dependency on debt.

d.a higher level of equity.

Which statement relating to workers' compensation insurance is incorrect?

Select one:

a.The percentage rate of premium is the same rate for all employers.

b.It is compulsory for all employers to take out workers' compensation insurance.

c.When workers' compensation insurance is paid in advance, the journal entry is: DR Prepaid workers' compensation insurance; CR Bank .

d.The premium is based on a percentage of the wages and salaries bill for the coming year.

Accountants must use when deciding if an item is material.

Select one:

a.a set of rules.

b.professional judgement.

c.the code of conduct.

d.a text book.

Accounting information that is representative of the real-world is likely to meet the Conceptual Framework's criteria of:

Select one:

a.comparability.

b.understandability.

c.relevance.

d.faithful representation.

Bert and Ernie agree to share profits and losses in the ratios 6:4. If the net loss is $30,000, how much loss is allocated to each partner?

Select one:

a.Bert $12 000; Ernie $18 000

b.Bert $20 000; Ernie $10 000

c.Bert $18 000; Ernie $12 000

d.Bert $26 000; Ernie $4 000