Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A business disposes of some inventory on credit for $80$. The inventory had first cost $50$. What effect will this have on the statement of financial position?

  • ACurrent assets decrease by $30$; owner’s capital decreases by $30$
  • BCurrent assets decrease by $30$; owner’s capital increases by $30$
  • CCurrent assets increase by $30$; owner’s capital decreases by $30$
  • DCurrent assets increase by $30$; owner’s capital increases by $30$

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