A Level Accounting (9706)•9706/11/O/N/19

Explanation
Sole trader closing capital equals net assets
Steps:
- Total assets = non-current assets + trade receivables + bank = 41,000 + 12,000 + 3,600 = 56,600
- Total liabilities = trade payables + long-term bank loan = 4,500 + 6,000 = 10,500
- Net assets (closing capital) = total assets - total liabilities = 56,600 - 10,500 = 46,100
- Drawings reduce capital but are already reflected in year-end bank balance, so no additional subtraction
Why B is correct:
- B matches net assets using the balance sheet equation Assets = Liabilities + Capital, where capital is the balancing figure at year end
Why the others are wrong:
- A subtracts drawings twice from net assets
- C excludes bank from assets
- D adds extra to assets without basis
Final answer: B
Topic: Preparation of financial statements
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