Question

The capital of business is found out by preparing
a. trading a/c b. statement of affairs c. statement profit or loss​

Answer 1

Answer:

c) statement profit or loss

Answer 2

ANSWER :

The capital of business is found out by preparing

a. Trading A/C

b. Statement of affairs ✓

c. Statement profit or loss

• The capital of business is found out by preparing Statement of affairs.

MORE TO KNOW :

• The capital or net worth or financial position of the business on a particular date can be found out roughly by preparing the "Statement of affairs".

• Statement of affairs is a statement which shows various assets and liabilities of the business at estimated values in order to ascertain the amount of capital of the business in a particular date.

• Opening Capital can be calculated by preparing a statement of affairs at the beginning of the accounting period.

• Closing Capital can be calculated by preparing a statement of affairs at the end of the accounting period.

• A statement of affairs is prepared to ascertain either opening capital or closing capital.

• A statement of affairs is not prepared from the Trial Balance and therefore, arithmetical accuracy is not assured.

• A statement of affairs is prepared from books of accounts based on incomplete records and hence information shown by it is les reliable.