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WAEC Financial Accounting 1996 Question 20

Question 20

Interpretation of Accounts

Fixed assets: N12,000
Current assets: N5,000
Current liabilities: N2,300
Capital: N10,000
Long term liabilities: N4,700
The working capital is

  1. A.N10,000
  2. B.N9,700
  3. C.N7,300
  4. D.N7,000
  5. E.N2,700.
Show the answer and explanation

Answer: E (N2,700.)

Explanation

Working capital = current assets − current liabilities = N5,000 − N2,300 = N2,700.