Home › Tamil Nadu HSC (Class 12) › accountancy › Accounts from Incomplete Records › In computing profit from incomplete records, dra…
In computing profit from incomplete records, drawings made during the year are:
ADeducted from the closing capital figure
BAdded back to the closing capital figure
CIgnored entirely in the whole computation
DAdded to the opening capital of the year
Answer & Solution
Correct answer: B. Added back to the closing capital figure
1. The computation takes the closing capital as its base.
2. Drawings would have reduced the closing capital during the year, so they are added back to undo that effect.
3. Additional capital introduced would have increased the closing capital, so it is subtracted.
4. The result is the adjusted closing capital, which is then compared with the opening capital.
5. The formula printed is closing capital plus drawings minus additional capital minus opening capital equals profit or loss.
_Source: TN HSC Class 12 Accountancy (Samacheer Kalvi, Govt of Tamil Nadu), Unit 1 "Accounts from Incomplete Records", §1.7.1_
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 the balance sheet prepared from incomplete records, the capital section is built up in In a problem, 'discount allowed by suppliers' of Rs 3,500 is posted in the solution as:In the closing statement of affairs, a provision of 5 per cent is to be created on debtorsWhy is a statement of affairs NOT called a balance sheet, even though it lists assets and 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 Rs