Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

Vikram is one of the partners in a business. Partners do not earn salaries or interest on capital, but they are charged $5\%$ interest on the amount in their drawings account. During the year, Vikram withdrew $40\,000$, and his share of profits came to $47\,500$. Once the relevant entries had been posted at the end of the financial year, his current account had a credit balance of $4500$. What was the opening debit balance on Vikram’s current account at the start of the financial year?

  • A$1000
  • B$3000
  • C$5000
  • D$5500

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