Accounting Test Question IR No.1 On Incomplete Records

Any change in capital structure will be influenced by any one or a combination of the following transactions, events or results:

• introduction of capital;
• drawings; and/or
• trading profits or losses.

By using the accounting equation, and given the values of opening and closing capital together with drawings and the amounts of any capital introductions, the value of profit or loss can be determined.

Accounting Test Question IR No. 1

Mr. A’s financial details for the years ended 2004 and 2005 showed: 2004 2005 Assets: Motor Vehicle 6,500 5,500 Equipment 2,500 2,000 Stock 750 1,650 Cash at Bank 900 1,300 10,650 10,450 Less Creditors 750 650 $9,900 $9,800 Mr A’s drawings for the year were $10,650. He had sold some shares for $1,050, the proceeds of which he had paid into his business bank account. Show the profit for the year 2005 of Mr. A.

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