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A brought a personal asset into the firm as capital whose correct value was Rs 60000 but it was recorded at Rs 50000. By how much will As capital be understated?

Answer and explanation

Correct answer: Rs 10000

Capital account is credited with the value of asset. Recording Rs 10000 less value understates capital by Rs 10000.

Related tags

Asset As CapitalUndervaluationCapital AccountCapital AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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