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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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