Question

2 points
(A) The business assets of a
firm amount to Rs.22,000 but
the liabilities stand at Rs.
47,000. What course of action
can the creditors take if it is a
sole proprietorship firm?
(i) Creditors can settle their account
O only to the extent of business
assets available i.e. Rs. 22,000
O
(ii) Besides using business assets
of Rs. 22,000, creditors can use the
personal property of the owner to
the extent of Rs. 25,000
(iii) Creditors can settle their
O account only to the extent of
owner's personal assets available
O (iv) None of these​

Answer 1

Answer:

: prepare accounting equation on the basis of the following transactions 1 started business with cash rs 50000 and goods rs 3000. 2 purchased goods for cash rs 30000 and on credit from karan rs 20000. 3 goods costing rs 40000 were sold for rs 55000 for cash. 4 withdrew cash for personal use rs 10000. 5 rent outstanding rs 2000.

Explanation:

points

(A) The business assets of a

firm amount to Rs.22,000 but

the liabilities stand at Rs.

47,000. What course of action

can the creditors take if it is a

sole proprietorship firm?

(i) Creditors can settle their account

O only to the extent of business

assets available i.e. Rs. 22,000

O

(ii) Besides using business assets

of Rs. 22,000, creditors can use the

personal property of the owner to

the extent of Rs. 25,000

(iii) Creditors can settle their

O account only to the extent of

owner's personal assets available

O (iv) None of these