Question

Opening Capital is ascertained by preparing - *​

Answer 1

Answer:

We prepare the Statement of Affairs at the beginning of the year to ascertain the opening capital and at the end of the year to ascertain the closing capital. However, the items of assets and liabilities are ascertained from vouchers, physical count and other relevant documents.

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Answer 2

Opening Capital is ascertained by preparing the Statement of Affairs.

• The Statement of Affairs is prepared at the beginning of the year to ascertain the opening capital and at the end of the year to ascertain the closing capital.
• It records the items such as assets and liabilities are ascertained from vouchers, physical count, and other relevant documents.
• Opening capital is obtained from statement of affairs prepared at the beginning of the year.
• A statement of affairs lists all the assets and liabilities of a business entity at the liquidation values.
• The statement of affairs method resembles the company's balance sheet in it which shows the company's net worth at a point in time.

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