We read your photo as:

Identify the item that is incorrectly classified in the given Balance Sheet and calculate the owner's equity after correction.

Accounting

ScanSolve AI Answer

Answer

D

Step-by-step solution

6 steps

Part 26· 3 steps

  1. Analyze the items listed under Assets and Liabilities in the provided Balance Sheet.

    • Assets: Cash at bank (K3000), BSP-Loan (K2000), Vehicle (K5000).
    • Liabilities: Loan from JC (K1000).

  2. Identify the nature of each item.

    • Cash at bank is an asset.
    • A Vehicle is an asset.
    • A Loan from JC is a liability (money owed to an external party).
    • A BSP-Loan is also money owed to an external party (the bank), making it a liability.

  3. Determine which item is incorrectly classified.

    The "BSP-Loan" is listed under Assets, but it is a liability. Therefore, it is recorded incorrectly.
    The correct option is D.
    D) BSP-Loan

Part 27· 3 steps

  1. Recall the accounting equation

    Assets = Liabilities + Owner's Equity (Capital).

  2. Correct the mistake identified in Question 26.

    The BSP-Loan of K2000 should be moved from Assets to Liabilities.

    • Corrected Assets: Cash at bank = K3000 Vehicle = K5000 Total Corrected Assets = K3000 + K5000 = K8000

    • Corrected Liabilities: Loan from JC = K1000 BSP-Loan = K2000 Total Corrected Liabilities = K1000 + K2000 = K3000

  3. Calculate the owner's contribution (Capital) using the corrected figures.

    Capital=Total Corrected Assets−Total Corrected Liabilities\text{Capital} = \text{Total Corrected Assets} - \text{Total Corrected Liabilities} Capital=K8000−K3000\text{Capital} = \text{K8000} - \text{K3000} Capital=K5000\text{Capital} = \text{K5000}

    The correct option is A.
    A) K5000

Part 28

Interest received is money earned by the business, typically from investments or bank deposits. This inflow of money is considered income.
The correct option is D.
D) revenue

Was this helpful?

Try one yourself

A new problem that tests the same skill.

Still stuck on this one?

Ask a follow-up, and the answer starts from this question.

Got a different question?Ask your own question

More Accounting Questions

QWhich item in the balance sheet is recorded incorrectly?QWhat are the total liabilities and owner's equity based on the provided Balance Sheet?QCalculate the value of the owner's equity at the end of the financial year.QPrepare a balance sheet from the following list of balances.QCalculate the correct balance on the Debtors Control account and the Debtors List.
See all Accounting questions →
Got a syllabus? Photograph it and I'll tell you what's due and what's worth the most.
Handwritten step-by-step solution preview

Handwritten Step-by-Step Solution

Get this as a handwritten image on WhatsApp — like a tutor wrote it for you.

Try on WhatsApp