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A firm has total assets of ₹8,40,000 and outside liabilities of ₹2,60,000. What is its capital employed?

Answer and explanation

Correct answer: ₹5,80,000

Capital employed = Total assets − Outside liabilities. Therefore, ₹8,40,000 − ₹2,60,000 = ₹5,80,000, so option B is correct. In such questions, outside liabilities are deducted from total assets; adding them would give an incorrect figure.

Related tags

Partnership AccountsGoodwillCapital EmployedNet AssetsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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