Use the information below to answer questions
Total current assets………………N2,000
Total fixed assets………………..N4,000
Current liabilities……………….N1,200
Drawings…………………………N200
Long-term loan……………………N2,000
Determine the capital of the business?
- A.
N9,400 - B.
N6,000 - C.
N3,400 - D.
N3,000
Correct Answer: Option D
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