Advertisements
Advertisements
Question
State the procedure for calculating profit or loss through the statement of affairs.
Short/Brief Note
Advertisements
Solution
The difference between the closing capital and the opening capital is taken as profit or loss of the business. Due adjustments are to be made for any withdrawal of capital from the business and for the additional capital introduced in the business.
Adjusting closing capital = Closing capital + Drawings – Opening capital.
Closing capital + Drawings – Additional capital – Opening capital = Proft/Loss.
shaalaa.com
Is there an error in this question or solution?
