alleryStart learning →The method of finding profit by comparing opening and closing capital is also known as the:
ANet worth method
BDouble entry method
CTotal debtors method
DTrial balance method
Answer & Solution
Correct answer: A. Net worth method
1. The method works by comparing the capital, or net worth, at two dates.
2. The textbook gives it three names: the statement of affairs method, the net worth method and the capital comparison method.
3. The double entry method is the complete system that incomplete records fall short of, so it is not an alias.
4. A trial balance cannot even be prepared reliably from incomplete records, which is one of their stated limitations.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 1 "Accounts from Incomplete Records", §1.7_
Keep practising Accounts from Incomplete Records
Browse all Accounts from Incomplete Records questions for Tamil Nadu HSC (Class 12), or explore more Accountancy topics.
Related questions
Opening stock is Rs 28,000, purchases Rs 40,000, carriage on purchases Rs 3,000, sales Rs Carriage on purchases and carriage on sales are taken to which accounts respectively?In a problem, 'discount allowed by suppliers' of Rs 3,500 is posted in the solution as:Opening capital is Rs 2,50,000, closing capital Rs 2,75,000, additional capital Rs 30,000 Opening capital is Rs 27,500, goods taken for personal use Rs 5,000, additional capital RsClosing capital is Rs 1,90,000, additional capital Rs 50,000, drawings Rs 30,000 and the lWhich account must be prepared to find the amount of bills receivable received during the Which of these is a limitation of incomplete records rather than merely a feature?