The capital of business is found out by preparing
a. trading a/c b. statement of affairs c. statement profit or loss
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Answer:
c) statement profit or loss
Answered by
1
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.
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