The beginning balance in the Capital account of a company was $10,000. The revenues and expenses were $200,000 and $120,000, respectively. The owner withdrew $4,000 during the year. The ending balance in the Capital account was $86,000.

Question

Quizplus · Accepted Answer

Beginning balance in Capital account = $10,000
Revenues = $200,000
Expenses = $120,000
Net Income = Revenues - Expenses = $200,000 - $120,000 = $80,000
Owner withdrawal = $4,000
Ending balance in Capital account = Beginning balance + Net Income - Owner withdrawal = $10,000 + $80,000 - $4,000 = $86,000. Therefore, the statement is true.

The Beginning Balance in the Capital Account of a Company