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Significance of Financial Analysis

Select the mo...

Question

Select the most appropriate answer the alternatives given below and rewrite the Sentences.

When Closing Capital is greater than Opening Capital it denotes ___________
a) profit
b) loss
c) no profit, no loss
d) assets.

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Solution

When Closing Capital is greater than Opening Capital it denotes profit.

Explanation: The formula to calculate closing capital is 'Opening Capital + Profit'. Hence, when closing capital is greater than opening capital, it denotes profit. However, if the closing capital is less than the opening capital, it denotes loss.

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