Accounting JAMB

Determine the capital of the business?

Total current assets………………N2,000
Total fixed assets………………..N4,000
Current liabilities……………….N1,200
Drawings…………………………N200
Long-term loan……………………N2,000

A. N9,400
B. N6,000
C. N3,400
D. N3,000

Correct Answer:

Option D – N3,000

Explanation

Capital = Assets – liabilities

Assets = Fixed assets + current assets + drawings

2000 + 4000 + 200 = 6200

Liabilities = current liabilities + longterm loans

1200 + 2000 = 3200

6200 – 3200 = 3000

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