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Accounts from Incomplete Records — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountAccounts from Incomplete Records3 Marks
Question
What is meant by Statement of Affairs?
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Answer

A Statement of Affairs is a statement of assets and liabilities. Difference between the amounts of the two sides is taken as capital. Under the Single Entry System, it is necessary to prepare Statement of Affairs at the end of the year and also in the beginning of the year, if not already prepared to determine profit. Statement of Affairs like Balance Sheet, has two sides-right-hand side for Assets and left-hand side for Liabilities. The difference between the total of assets and liabilities is capital.
Capital = Total Assets – Liabilities

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