AQA A-Level Accounting: Partnership accounts (7127) – Practice Questions

These are original questions written for Marlbridge, for revision and practice on this content. They are not reproduced past-paper questions, and they do not replicate the exam’s exact structure, question count or mark tariffs – examination boards hold copyright in their own papers. Use these alongside the official past papers from your board or school.

These questions cover section 3.15, Partnership accounts, of the AQA A-level Accounting (7127) specification (version 1.1, October 2026, A-level exams June 2019 onwards). The qualification is not tiered and section 3.15 is assessed on Paper 1. Use a calculator throughout. All businesses and figures are invented.

Learn the content with the study guide and the revision notes. See also the AQA A-level Accounting hub, the 7127 checklist and the free diagnostics.

Questions

1. State three terms of the Partnership Act 1890 that apply when partners have no agreement. [3]

2. The year ends 31 December. Interest on drawings is 8% a year from the date of each drawing. In 2025 partner Harker drew £6,000 on 1 March, £4,000 on 1 July and £3,000 on 1 October. Calculate the interest on drawings. [3]

3. Patel and Quinn’s profit for the year ended 30 June 2026 was £22,000. Their agreement gives interest on capital at 6% a year (capitals: Patel £50,000, Quinn £30,000), a salary to Quinn of £20,000 and residual profits or losses shared Patel 3 : Quinn 2. Interest on drawings was Patel £500 and Quinn £300. Prepare the appropriation account. [6]

4. West and York keep fixed capital accounts. For the year ended 31 March 2026:

	West £	York £
Current account at 1 April 2025	1,500 credit	900 debit
Interest on capital	2,400	1,600
Salary	–	12,000
Share of residual profit	18,600	12,400
Interest on drawings	420	380
Drawings	21,000	26,500

Prepare the partners’ current accounts in columnar form. [6]

5. Abel (capital £80,000) and Bryce (capital £20,000) have no partnership agreement. Abel wants interest on capital at 10% a year. Bryce, who works full time in the business, wants a salary of £12,000. Profit for the year is £36,000.

(a) Calculate the amount credited to each partner, explaining your answer. [3] (b) Give one reason why the partners should draw up an agreement. [1]

6. Dunn and Ellis share profits equally. Ford is to be admitted on 1 January 2026. Before admission, land is revalued upward by £10,000, equipment downward by £2,500 and inventory downward by £700. Prepare the revaluation account. [4]

7. Continuing question 6: goodwill is valued at £30,000 and will not be kept in the books. The new ratio is Dunn 2 : Ellis 1 : Ford 1. Ford pays £40,000 into the bank as capital.

(a) Calculate the goodwill entries in each capital account and Ford’s capital after admission. [3] (b) Explain the net effect of the goodwill entries on each partner. [2]

8. Ormond and Price’s profit before loan interest for the year ended 31 December 2025 was £71,300. Price lent the firm £20,000 on 1 January 2025; the agreement allows interest on it at 4% a year. The agreement also provides:

• interest on fixed capitals at 5% a year (Ormond £80,000, Price £40,000)
• a salary for Price of £15,000
• interest on drawings: Ormond £900, Price £600
• residual profit shared Ormond 3 : Price 2.

Current accounts at 1 January 2025: Ormond £3,500 credit, Price £1,200 credit. Drawings: Ormond £32,000, Price £34,000.

(a) Calculate the profit for the year, explaining the treatment of the loan interest. [2] (b) Prepare the appropriation account for the year ended 31 December 2025. [6] (c) Calculate each partner’s current account balance at 31 December 2025 and prepare the equity section of the statement of financial position. [4]

9. Taylor, Upton and Vale share profits 3 : 2 : 1. Vale retires on 30 September 2026, when capitals were Taylor £50,000, Upton £40,000 and Vale £20,000, and Vale’s current account had a debit balance of £1,800. On retirement:

• premises are revalued upward by £18,000 and vehicles downward by £3,000
• the provision for doubtful debts is increased by £1,200
• goodwill is valued at £36,000 and will not be kept; Taylor and Upton continue to share 3 : 2
• Vale is paid £8,000 by bank transfer and the rest is left as a loan to the firm.

(a) Prepare the revaluation account. [3] (b) Prepare the partners’ capital accounts. [5] (c) State the amount of Vale’s loan and where it appears in the statement of financial position. [2]

10. Using the current accounts from question 4, comment on the partners’ balances at 31 March 2026 and evaluate whether West and York should agree a limit on drawings. [6]

Answers

1. Any three: profits and losses shared equally [1]; no interest on capital [1]; no partnership salaries [1]; also accept: no interest charged on drawings; interest allowed on a partner’s loan to the firm. [3] Examiner insight: Repeating one term in different words gains no second mark.

2. 6,000 x 8% x 10/12 = £400 and 4,000 x 8% x 6/12 = £160 [1]; 3,000 x 8% x 3/12 = £60 [1]; total £620 [1]. [3] Examiner insight: Months run from the drawing date to the year end; a full year on each drawing loses the method marks.

3.

Appropriation account for the year ended 30 June 2026
                                        £        £
Profit for the year                           22,000
Add Interest on drawings: Patel        500
                          Quinn        300       800
                                              22,800
Less Interest on capital: Patel      3,000
                          Quinn      1,800    (4,800)
     Salary: Quinn                           (20,000)
Residual loss                                 (2,000)
Share of loss: Patel (3/5)          (1,200)
               Quinn (2/5)            (800)   (2,000)

Interest on drawings added [1]; interest on capital [1]; salary [1]; residual loss £2,000 [1]; shares £1,200 and £800 as losses [1]; layout and subtotals [1]. [6] Examiner insight: Interest and salary are credited in full even when profit is too small; scaling the salary down loses most of the marks.

4.

Current accounts
                     West    York                       West    York
                        £       £                          £       £
Balance b/d             -     900  Balance b/d         1,500       -
Interest on drawings  420     380  Interest on capital 2,400   1,600
Drawings           21,000  26,500  Salary                  -  12,000
Balance c/d         1,080       -  Share of profit    18,600  12,400
                                   Balance c/d             -   1,780
                   22,500  27,780                     22,500  27,780
Balance b/d             -   1,780  Balance b/d         1,080       -

Opening balances [1]; interest on capital and salary [1]; profit shares [1]; interest on drawings and drawings [1]; West £1,080 credit [1]; York £1,780 debit [1]. [6] Examiner insight: York’s opening debit balance belongs on the debit side; on the credit side it changes the closing balance, leaving only own-figure marks.

5. (a) With no agreement the Partnership Act 1890 applies [1]; neither interest on capital nor a salary is allowed [1]; profit is shared equally, £18,000 each [1]. (b) An agreement lets rewards reflect each partner’s capital and work; under the Act Bryce’s full-time work earns nothing extra [1]. [4] Examiner insight: Calculating the claimed interest or salary scores nothing; the question tests the Act’s defaults.

6.

Revaluation account
                        £                          £
Equipment           2,500    Land             10,000
Inventory             700
Capital: Dunn       3,400
Capital: Ellis      3,400
                   10,000                     10,000

Decreases debited [1]; increase credited [1]; profit £6,800 [1]; £3,400 each to capital [1]. [4] Examiner insight: Sharing with Ford, who was not a partner when values changed, loses the final mark.

7. (a) Created 1 : 1: Dunn £15,000 and Ellis £15,000 credited [1]; written off 2 : 1 : 1: Dunn £15,000, Ellis £7,500 and Ford £7,500 debited [1]; Ford’s capital 40,000 - 7,500 = £32,500 [1]. (b) Dunn’s net effect is nil, because his share stays at one half [1]; Ellis gains £7,500 and Ford loses £7,500, so Ford in effect pays Ellis for the profit share Ellis gives up (one half down to one quarter) [1]. [5] Examiner insight: Link each gain or loss to the change in profit share; net figures without the reason earn only part of the credit.

8. (a) Loan interest 20,000 x 4% = £800 [1]; it is an expense in the income statement because the loan is a debt of the firm, so profit for the year is 71,300 - 800 = £70,500 [1]. (b)

Appropriation account for the year ended 31 December 2025
                                         £        £
Profit for the year                            70,500
Add Interest on drawings: Ormond        900
                          Price         600     1,500
                                               72,000
Less Interest on capital: Ormond      4,000
                          Price       2,000    (6,000)
     Salary: Price                            (15,000)
Residual profit                                51,000
Share of profit: Ormond (3/5)        30,600
                 Price (2/5)         20,400    51,000

Interest on drawings added [1]; interest on capital [1]; salary [1]; residual profit £51,000 [1]; shares £30,600 and £20,400 [1]; layout [1]. (c) Ormond: 3,500 + 4,000 + 30,600 - 900 - 32,000 = £5,200 credit [1]. Price: 1,200 + 2,000 + 15,000 + 20,400 - 600 - 34,000 = £4,000 credit [1].

                      Ormond     Price      Total
                           £         £          £
Capital accounts      80,000    40,000    120,000
Current accounts       5,200     4,000      9,200
                                          129,200

Equity total £129,200 [1]; Price’s loan of £20,000 shown under non-current liabilities, not equity [1]. [12] Examiner insight: Loan interest placed in the appropriation account loses the treatment mark in (a) and the residual mark; own-figure marks can follow.

9. (a)

Revaluation account
                                   £                       £
Vehicles                       3,000    Premises      18,000
Provision for doubtful debts   1,200
Capital: Taylor                6,900
Capital: Upton                 4,600
Capital: Vale                  2,300
                              18,000                  18,000

Decreases debited [1]; increase credited [1]; profit £13,800 shared 3 : 2 : 1 [1]. (b)

Capital accounts
                 Taylor    Upton     Vale                 Taylor    Upton     Vale
                      £        £        £                      £        £        £
Current a/c           -        -    1,800  Balance b/d   50,000   40,000   20,000
Goodwill         21,600   14,400        -  Revaluation    6,900    4,600    2,300
Bank                  -        -    8,000  Goodwill      18,000   12,000    6,000
Loan - Vale           -        -   18,500
Balance c/d      53,300   42,200        -
                 74,900   56,600   28,300                 74,900   56,600   28,300

Vale’s current account debited [1]; revaluation shares [1]; goodwill created 3 : 2 : 1 [1]; goodwill written off 3 : 2 [1]; Vale settled by £8,000 bank and £18,500 loan, Taylor £53,300, Upton £42,200 [1]. (c) £18,500 [1]; a liability, under non-current liabilities unless repayable within 12 months [1]. [10] Examiner insight: Adding Vale’s debit balance gives £30,100 due; only own-figure marks then follow.

10. York’s £1,780 debit balance shows he drew more than his opening balance plus everything credited to him, so he in effect owes the firm [1]. West’s balance fell from £1,500 to £1,080: he also drew nearly all his share [1]. This drains cash needed to pay suppliers or fund growth [1]. Against a limit: partners may rely on drawings as income, and interest on drawings already discourages early withdrawals [1]. A limit could match each partner’s expected total share [1]. Judgement: a limit is sensible, mainly for York, as repeated debit balances reduce the firm’s resources [1]. [6] Examiner insight: Use the figures; general points about drawings limit the marks, and “evaluate” needs a supported conclusion.

Where marks are usually lost

• Treating interest on a partner’s loan as an appropriation rather than an expense.
• Subtracting interest on drawings in the appropriation account.
• Ignoring the months in interest on drawings.
• Applying salaries or interest on capital where the Partnership Act 1890 applies.
• Sharing revaluation profit or goodwill created in the new ratio, or including the incoming partner.
• Adding a retiring partner’s debit current account balance to the amount due.

Next steps

• Revision notes for this topic
• Study guide for this topic
• AQA A-level Accounting hub
• 7127 checklist
• All free 10-minute diagnostics
• Book a free trial class

Official syllabus

AQA A-level Accounting (7127) specification, version 1.1, October 2026, for A-level exams June 2019 onwards, published by AQA – section 3.15, Partnership accounts.