1. Profile photo of anonymous says

    Sir, i have a doubt. The Foll. is a T- account- capital a/c. What should i understand when income statement is 400 and how do I know when to write this?

    Capital a/c
    Drawings 100 Cash 5000
    Income Statement 400
    Balance 5300

    • Profile photo of John Moffat says

      In future please ask questions in the Ask the Tutor Forum – not as a comment on a lecture about something completely different :-)

      In the exam you can not be asked to prepare t-accounts – sometimes they are useful in your own workings, but that is really all.
      The amount owed to the owner (the capital) increases due to any profit (from the income statement) and decreases due to any drawings. That is all that is happening here.
      You should watch the lecture on chapters 2 and 3 of the Lecture Notes where this is all explained.

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