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a trader’s net profit for the year may be computed by using what formulea?
A.opening capital+drawings-capitalintroduced-closing capital
B.opening capital+drawings-capitalintroduced-opening capital
c.opening capital-drawings+capitalintroduced-closing capital
d.opening capital-drawings-capitalintroduced-closing capitalWhy is this in F4?
Your option B above cannot have been copied correctly! Opening capital + d – CI – opening capital? Surely it should read:
Closing capital + drawings – capital introduced – opening capital
The basic equation is:
opening capital + capital introduced + profit – drawings = closing capital
Rearranging:-
profit = closing capital + drawings – capital introduced – opening capital
Check that you have copied the question correctly!
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