Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 17 - No. 49)
What is the formula to calculate the profit or loss for the year, provided equity at the start and end of the year and drawings is known?
Opening equity + Drawings - Closing equity
Closing equity + Drawings - Opening equity
Closing equity - Drawings - Opening equity
Opening equity - Drawings + Closing equity
Explanation
The formula accurately presents the relationship between the components of equity, allowing for the profit or loss determination.
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