JAMB Accounts Principles of Accounts 2016 Paper

Concept:The accounting equation states that assets equal capital plus liabilities. Rearranged, capital equals assets minus liabilities.Explanation:Total liabilities are the loan plus the creditor balance.Total liabilities $= \$14,000 + \$8,000 = \$22,000$Given total assets $= \$190,500$Firm's capital $= \text{Assets} - \text{Liabilities}$Firm's capital $= \$190,500 - \$22,000 = \$168,500$Answer:The firm's capital is $\$168,500$.