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JAMB Principles of Accounts 2005 Question 4

Question 4

Accounting Equation

Given:
Liabilities ₦23 700
Current assets ₦20 300
Fixed assets ₦64 500
What is the capital introduced by the proprietor?

  1. A.₦40 800
  2. B.₦61 100
  3. C.₦88 200
  4. D.₦108 500
Show the answer and explanation

Answer: B (₦61 100)

Explanation

Capital = assets − liabilities = (20 300 + 64 500) − 23 700 = ₦61 100.