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GCE Financial Accounting 1989 Question 2

Question 2

Accounting Equation

T. Trader sets aside from his private funds ₦1,500 for business purposes. The ₦1,500 would be referred to as

  1. A.Capital
  2. B.Loan
  3. C.Reserve
  4. D.Drawings
  5. E.Profit
Show the answer and explanation

Answer: A (Capital)

Explanation

Money the owner puts into the business from his own funds is capital.