Question

Following balances appeared in the books of Rishabh on 1 January 2019: Furniture Rs.40,000; Creditors Rs.
30,000; Cash Rs.6,000; Bank Rs. 10,000; Debtors Rs.45,000; Bills Payable Rs. 5,000; Stock Rs. 44,000; Capital
account will be credited with Rs.

O a 101.000
O b. 110,000
O c. 1,02,000
d. 100.000​

Answer 1

Concept:

The capital account shows the net worth of the business at a specific point of time. It the difference between the Total assets and the outside liability of the business.

Given:

• Furniture Rs.40,000

• Creditors Rs.30,000

• Cash Rs.6,000

• Bank Rs. 10,000

• Debtors Rs.45,000

• Bills Payable Rs. 5,000

• Stock Rs. 44,000

Find: the balance in the capital account

Solution:

1. Total Assets = Furniture+ cash+ bank+ debtors+ stock

Total Assets=40,000+6,000+10,000+45,000+44,000

Total Assets= 1,45,000

2. Outside Liability = Creditors+ Bills Payables

Outside Liability = 30,000+5,000

Outside Liability = 35,000

3. Capital = Total Assets – Outside Liability

Capital = 1,45,000 – 35,000

Capital = 1,10,000

Hence ,

The balance in the capital account is 1,10,000.

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