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WAEC Financial Accounting 2020 Question 8

Question 8

Incomplete Records

In a situation of incomplete records, profit is determined as

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

Answer: C (closing capital + drawings − opening capital.)

Explanation

Profit = closing capital + drawings − opening capital (less any new capital).