alleryStart learning →A statement of affairs is best described as a statement showing:
AAll the income and expenditure of a period
BThe balances of assets and liabilities on a date
CA summary of every cash transaction of the year
DA summary of all credit transactions of a firm
Answer & Solution
Correct answer: B. The balances of assets and liabilities on a date
1. A statement of affairs shows the balances of assets and liabilities on a particular date.
2. It is prepared from incomplete records to find out the capital of a business unit on that date.
3. The difference between the total of assets and the total of liabilities is taken as capital.
4. It resembles a balance sheet in shape, but it lists balances rather than income and expenditure.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 1 "Accounts from Incomplete Records", §1.7.3_
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