Computation of Profits From Two Balance Sheets Showing The Opening And Closing Capital - SS2 Accounting Past Questions and Answers - page 1
1
What is the formula to compute profits from two balance sheets?
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A
Profit = Closing Capital - Opening Capital - Additional Investments + Drawings
B
Profit = Closing Capital + Opening Capital - Additional Investments - Drawings
C
Profit = Closing Capital - Opening Capital + Additional Investments + Drawings
D
None of the above
2
What is the accounting profit?
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A
Cash inflows during the year
B
Cash outflows during the year
C
Profit calculated using the formula: Profit = Closing Capital - Opening Capital - Additional Investments + Drawings
D
None of the above
3
What is the difference between accounting profit and cash profit?
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A
Accounting profit considers cash inflows and outflows during the year, while cash profit does not.
B
Cash profit considers cash inflows and outflows during the year while accounting profit does not.
C
There is no difference between accounting profit and cash profit.
D
None of the above
4
What happens to the profit if there were additional investments made during the year?
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A
It remains the same
B
It increases
C
It decreases
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D
Cannot be determined
5
What happens to the profit if there were drawings made during the year?
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A
It remains the same
B
It increases
C
It decreases
D
Cannot be determined
6
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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7
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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