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:
- Loss of £1,850
- Profit of £1,850
- Loss of £8,450
- 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
- Correct – Opening capital + Profit (-loss) – Drawings = Closing capital. Therefore £16,500 + profit or loss – £3,300 = £11,350. Therefore, loss = £1,850
- Not correct
- Not correct
- Not correct
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