A statement of changes in equity shows closing capital as:
A) beginning capital + capital contribution - profit - drawings.
B) beginning capital + capital contribution + profit + drawings.
C) beginning capital + capital contribution + profit - drawings.
D) beginning capital - capital contribution + profit - drawings.

Question

Quizplus · Accepted Answer

Closing capital represents the total equity of the business at the end of the accounting period. It is calculated as the beginning capital plus any capital contributions made during the period, plus any profits earned during the period, minus any drawings taken by the owner during the period. Therefore, option C is the correct choice, as it adds the beginning capital, capital contribution, and profit, and deducts drawings to arrive at the closing capital balance.

A Statement of Changes in Equity Shows Closing Capital As