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Question

The capital of a sole trader would change as a result :

A A creditor being paid his account by cheque. Correct Answer Incorrect Answer
B Raw materials being purchased on credit. Correct Answer Incorrect Answer
C Fixed assets being purchased on credit. Correct Answer Incorrect Answer
D Wages being paid in cash. Correct Answer Incorrect Answer
E None of the above Correct Answer Incorrect Answer

Solution

Wages are expenses which impact P&L, it will reduce the profit which eventually added to capital; hence it will impact the capital of sole trader.

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