The following is a summary of the asset and liabilities of Ojo trading company as at 31st December, 2018
| Initial Capital | 5000 |
| Net Profit | 1000 |
| Furniture | 2000 |
| Equipment | 2900 |
| Debtors | 100 |
| Stock | 1000 |
| Bank | 500 |
A. 100
B. 6000
C. 600
D. 3000
Correct Answer: Option C
C. 600
Explanation
From accounting equation;
Assets = Capital + liabilities
Therefore, liabilities = Assets – Capital
Liabilities = (4900 + 1600) – (500 + 1000) = 6500 – 6000
⇒ ₦600
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