Day: April 8, 2020

A firm‘s capital at the beginning of a year was £16,500 and its capital at the end of the same year was £11,350.

The proprietor‘s drawings during the year totalled £3,300 and no new capital was introduced.

The firm‘s profit or loss for the year was?

Select ONE answer:

1. Loss of £1,850
2. Profit of £1,850
3. Loss of £8,450
4. Profit of £8,450

 

Show your workings to arrive at your answer, and explain and justify your reasons:

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This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – Opening capital + Profit (-loss) – Drawings = Closing capital.  Therefore £16,500 + profit or loss – £3,300 = £11,350.  Therefore, loss = £1,850
2. Not correct
3. Not correct
4. Not correct

 

 

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