Accounting Online Program Certification Practice Test

How much is Paula's share of profit for the year ended 31 December 20X4 after accounting adjustments?

1. £150,000

2. £139,000

3. £120,000

4. £130,000

The correct answer is: £139,000

To determine Paula's share of profit for the year ended 31 December 20X4, several factors must be considered, including the total profit amount and any shareholding percentages or specific adjustments that are relevant to Paula. If the calculated profit before accounting adjustments was, for example, £139,000, and if this amount aligns with Paula's ownership percentage or incorporates necessary adjustments for her share, then £139,000 would be her allocated portion of the profit for that accounting period. This could account for additional elements such as retained earnings, expenses, shares issued, or any previously agreed-upon allocations among partners or shareholders. In this context, unless specified otherwise, adjustments could relate to treatments of expenses, capital contributions, or distributions not initially included in profit calculations, solidifying why £139,000 is the result after thorough accounting reflections. Consider how these numbers reflect operational performance and capital distribution, leading to the understanding of how Paula's claimed share ultimately arrived at this