S1: In the Single Entry System, the Statement of Affairs is prepared to ascertain the profit or loss for the year. S2: The difference between the closing and opening capital in a Statement of Affairs represents the profit or loss, adjusted for drawings and additional capital. Which statement(s) is/are correct? MCQ with Answer and Explanation
S1: In the Single Entry System, the Statement of Affairs is prepared to ascertain the profit or loss for the year. S2: The difference between the closing and opening capital in a Statement of Affairs represents the profit or loss, adjusted for drawings and additional capital. Which statement(s) is/are correct?
A. S1 only
B. S2 only
C. Both S1 and S2
D. Neither S1 nor S2
Answer: Option B
Solution (By JKSSB Mock Tests)
S1 is incorrect because the Statement of Affairs ascertains capital, not profit/loss directly. S2 is correct; profit/loss is derived by comparing closing and opening capital, adjusting for drawings and fresh capital introduced.
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