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WAEC Financial Accounting 2023 Question 38

Question 38

Incomplete Records

Beauty started business with ₦40,000, made a profit of ₦50,000 and ended the year with ₦70,000 capital. What would have accounted for the closing capital?

  1. A.Cash shortage of ₦30,000 was recorded
  2. B.Drawings of ₦20,000 was made
  3. C.Beauty was paid a salary of ₦10,000
  4. D.The opening capital of ₦40,000 was invested.
Show the answer and explanation

Answer: B (Drawings of ₦20,000 was made)

Explanation

40,000 + 50,000 = 90,000; the capital is only 70,000, so ₦20,000 was withdrawn as drawings.