Question

Total assets of a firm is Rs.1,00,000, outside liability amounted to Rs.40,000, total capital contributed by the partners would be _________.

• A. Rs. 60,000
• B. Rs.1,40,000
• C. Rs.40,000
• D. Rs.80,000

Answer 1

The correct option is A Rs. 60,000

Accounting Equation can be defined as:

Owner's Capital + Outside Liabilities = Total Assets

by puttig the available information:

Owner's Capital + Rs.40000 = Rs.100000

Owner's Capital = Rs.100000 - Rs.40000

Owner's Capital = Rs.60000