A business has total assets of Rs. 900,000 and total liabilities of Rs. 350,000. What is the owner's equity?
Correct answer: B. Rs. 550,000
- A. Rs. 450,000
- B. Rs. 550,000
- C. Rs. 1,250,000
- D. Rs. 3,150,000
Explanation
Equity is calculated as assets minus liabilities. Therefore, Rs. 900,000 minus Rs. 350,000 gives equity of Rs. 550,000.
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About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
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