Answer to Question #110330 in Accounting for LAVISH

Question

A sole trader incurred a loss of £10,000 during his most recent accounting period, yet

had more money in his bank account at the end of the period than he had at the

beginning of it. Which of the following, on its own, could explain this?

a. The introduction of £15,000 new capital during the period.

b. The purchase of Non-current assets during the period.

c. His customers taking longer than normal to pay the amounts they owe to him.

d. An increase in the amount of his Inventory over the course of the period.

Answer 1

If a sole trader incurred a loss of £10,000 during his most recent accounting period, and had more money in his bank account at the end of the period than he had at the beginning of it, then there may be the introduction of £15,000 new capital during the period.

So, the correct answer is a.