Question - A statement similar to balance sheet prepared to find out the amount of opening capital is ___________.

A

Opening statement of affairs

B

Balance sheet

C

Profit and loss accounts

D

Cash flow statement

Hard

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Solution

Under Single entry system Opening Capital is ascertained from the Accounting equation  "CAPITAL = ASSET - LIABILITIES" Such statement which makes use of equation is called opening statement of affairs. Balance sheet is the statement which comprises of the assets, liabilities and the capital which also satisfies the accounting equation. Therefore, statement of affairs is considered similar to the balance sheet.