Multiple choice

Closing capital + drawing profit equals to

  1. gross profit

  2. expenses

  3. opening capital

  4. liabilities

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

In accounting, the equation 'Closing Capital + Drawings = Opening Capital' represents the relationship between capital accounts when drawings are deducted from profit. This follows from: Opening Capital + Profit - Drawings = Closing Capital. Therefore, Closing Capital + Drawings = Opening Capital + Profit, and when profit is included, it equals Opening Capital.

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