Computation of Profits From Two Balance Sheets Showing The Opening And Closing Capital - SS2 Accounting Past Questions and Answers - page 1
What is the formula to compute profits from two balance sheets?
Profit = Closing Capital - Opening Capital - Additional Investments + Drawings
Profit = Closing Capital + Opening Capital - Additional Investments - Drawings
Profit = Closing Capital - Opening Capital + Additional Investments + Drawings
None of the above
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What is the accounting profit?
Cash inflows during the year
Cash outflows during the year
Profit calculated using the formula: Profit = Closing Capital - Opening Capital - Additional Investments + Drawings
None of the above
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What is the difference between accounting profit and cash profit?
Accounting profit considers cash inflows and outflows during the year, while cash profit does not.
Cash profit considers cash inflows and outflows during the year while accounting profit does not.
There is no difference between accounting profit and cash profit.
None of the above
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What happens to the profit if there were additional investments made during the year?
It remains the same
It increases
It decreases
Cannot be determined
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What happens to the profit if there were drawings made during the year?
It remains the same
It increases
It decreases
Cannot be determined
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ABC TECH started a business with a capital of ₦50,000. At the end of the year, their capital had increased to ₦60,000. The company made additional investments of ₦5,000 during the year and did not make any drawings. What is the company’s profit for the year?
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Mr B started a business with a capital of ₦100,000. At the end of the year, his capital had decreased to ₦80,000. He made additional investments of ₦10,000 during the year and made drawings of ₦5,000. What is his profit for the year?
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