Q.The amount of capital of the proprietor, if his Assets are ₹ 85,000 and Liabilities are ₹ 21,000 :

A Statement of Affairs is a Balance-Sheet-shaped list of a trader's estimated assets and liabilities on a given date, from which Capital is derived as the balancing figure (Capital = Assets − Liabilities). Unlike a true Balance Sheet, its figures come from incomplete records, physical counts, and estimates rather than a fully balanced ledger, so the capital figure it yields is only as reliable as the estimates behind it. The Capital Comparison (Net Worth) Method uses two such statements — one at the start and one at the end of the accounting year — to estimate the year's profit: Profit = Closing Capital + Drawings − A …