Accounting Online Program Certification Practice Test 2025 – Your All-in-One Guide to Exam Success!

To arrive at the profit distribution for Gordon, Hilary, and Indi, it's essential to understand the profit-sharing agreement established by the individuals involved, which typically outlines how profits (or losses) are divided among partners or shareholders based on specific ratios or arrangements set forth in any partnership agreement.

In this scenario, assuming the agreement stipulates a split that aligns with the amounts listed in the first choice, the figures presented indicate that the total profits have been correctly allocated based on the agreed-upon proportions. The distribution of £192,000 to Gordon, £104,000 to Hilary, and £84,000 to Indi reflects a calculation that could be derived from their respective ownership percentages, contributions, or any other criteria defined in their partnership agreement.

It is relevant to ensure that the total adds up correctly and matches the total profit of £380,000 for the year, confirming that this allocation is plausible given the stated figures. The total from this choice meets this requirement, suggesting the distribution is not only correct numerically but conceptually aligns with standard practices in profit sharing among partners.

In other options, the profit amounts differ from the ones in choice A, indicating alternative distributions that likely do not align with the agreed-upon ratios. Therefore, when