K_ Correct answers only!

The capital of a sole trader would change as a result of

Aa creditor being paid his account by cheque

Braw materials being purchased on credit

Cfixed assets being purchased on credit

Dwages being paid in cash

(2 marks)

2.3The 'accounting equation' can be rewritten as

Aassets plus profit less drawings less liabilities equals closing capital

Bassets plus liabilities less drawings equals opening capital plus profit

Cassets less liabilities less opening capital plus drawings equals profit

Dopening capital plus profit less drawings less liabilities equals assets

(2 marks)

2.4 An increase in stock of 500, a decrease in the bank balance of 800 and an increase in creditors of 2,400 results in

Aa decrease in working capital of 2,700

Ban increase in working capital of 2,700

Ca decrease in working capital of 2,100

Dan increase in working capital of 2,100

(2 marks)

2.5 A sole trader had opening capital of 20,000 and closing capital of 9,000. During the period, the owner introduced capital of 8,000 and withdrew 16,000 for her own use. Her profit or loss during the period was

(2 marks)

2.6 The accounting equation can change as a result of certain transactions. Which one of the following transactions would not affect the accounting equation?

ASelling goods more than their cost

BPurchasing a fixed asset on credit

CThe owner withdrawing cash

DDebtors paying their accounts in full, in cash

(2 marks