Question

While ascertaining profit in single entry system the amount of additional capital introduced is ___________.

• A. added to the capital in the beginning
• B. deducted from the capital in the beginning
• C. added to the capital at the end
• D. deducted from the capital at the end

Answer 1

The correct option is D deducted from the capital at the end

When single entry system is followed, profits can be calculated by comparing the capital at the beginning of the year and capital at the end of the year. This can be formulated as:

Opening capital+Capital introduced during the year+Profit during the year-Drawings=Closing capital.