JAMB Accounts Principles of Accounts 2018 Paper

Concept:Capital employed is the amount of funds used by a business to generate profit.It is the net investment in the business as shown in the balance sheet.Explanation:The easiest way to find capital employed is to use the balance sheet figures.Capital employed equals total assets minus current liabilities.This is because current liabilities are debts due within one year and must be deducted from assets.From the given balance sheet, the total assets amount to $\text{₦}22{,}000$.The current liabilities amount to $\text{₦}7{,}000$.Substitute into the formula:$\text{Capital employed} = \text{Total assets} - \text{Current liabilities}$$\text{Capital employed} = \text{₦}22{,}000 - \text{₦}7{,}000$$\text{Capital employed} = \text{₦}15{,}000$Answer:$\text{₦}15{,}000$Therefore, the correct option is D.