My Learning Cart
?
Categories
Account

If a sole trader has a net profit of $50,000 and drawings of $10,000, what is th

₹0.0
Login to Download
  • 📥 Instant PDF Download
  • ♾ Lifetime Access
  • 🛡 Secure & Original Content

What’s inside this PDF?

Question: If a sole trader has a net profit of $50,000 and drawings of $10,000, what is the closing balance of the capital account?

Options:

  1. $40,000
  2. $50,000
  3. $60,000
  4. $70,000

Correct Answer: $60,000

Solution: 

The closing balance of the capital account is calculated as net profit minus drawings: $50,000 - $10,000 = $40,000.

If a sole trader has a net profit of $50,000 and drawings of $10,000, what is th

Practice Questions

Q1
If a sole trader has a net profit of $50,000 and drawings of $10,000, what is the closing balance of the capital account?
  1. $40,000
  2. $50,000
  3. $60,000
  4. $70,000

Questions & Step-by-Step Solutions

If a sole trader has a net profit of $50,000 and drawings of $10,000, what is the closing balance of the capital account?
  • Step 1: Identify the net profit, which is $50,000.
  • Step 2: Identify the drawings, which are $10,000.
  • Step 3: Subtract the drawings from the net profit: $50,000 - $10,000.
  • Step 4: Calculate the result, which is $40,000.
  • Step 5: The result is the closing balance of the capital account.
  • Net Profit – The total earnings of a sole trader after all expenses have been deducted.
  • Drawings – The amount of money taken out of the business by the sole trader for personal use.
  • Capital Account – An account that reflects the owner's equity in the business, adjusted for profits and withdrawals.
Soulshift Feedback ×

On a scale of 0–10, how likely are you to recommend The Soulshift Academy?

Not likely Very likely
Home Practice Performance eBooks