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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_
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