Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 17 - No. 8)
A business had opening and closing assets and liabilities. The owner introduced capital of $5,000 and made drawings of $10,000. If the business made a profit of $2,000 during the year, what was the change in the equity?
An increase of $17,000
A decrease of $3,000
A decrease of $13,000
An increase of $7,000
Explanation
Equity changes = Profit + Drawings - Capital introduced = 2,000 + 10,000 - 5,000 = $7,000
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