O Level Accounting (7707)•7707/12/O/N/22
Explanation
Sole trader capital account adjustment
Steps:
- Start with opening capital balance of $20,000 on 1 June 2021.
- Subtract net loss for the year ended 31 May 2022: 14,200 = $5,800.
- Subtract drawings for goods withdrawn at cost: 1,900 = $3,900.
- The calculated closing balance on 1 June 2022 is $3,900, not matching any option.
Not enough information.
Why A is correct:
- Not enough information, as standard calculation yields $3,900.
Why the others are wrong:
- B: Incorrect; does not match standard calculation.
- C: Incorrect; does not match standard calculation.
- D: Incorrect; does not match standard calculation.
Final answer: A
Topic: Sole traders
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