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JAMB Principles of Accounts 2013 Question 23

Question 23

Incomplete Records

The estimated profit or loss for a period is calculated by

  1. A.closing capital less opening capital add drawings.
  2. B.opening capital less closing capital add drawings.
  3. C.opening capital less drawings add closing capital.
  4. D.opening capital add closing capital add drawings.
Show the answer and explanation

Answer: A (closing capital less opening capital add drawings.)

Explanation

The rise in capital plus what the owner took out (drawings) is the profit.