If the opening capital is Rs 80,000 and closing capital is Rs 1,00,000 then what is the amount of profit or loss?
Last updated May 13, 2026
Correct Answer:
Option C —
profit 20,000
In accounting, the simplest way to determine the profit or loss for a period (assuming no additional capital was introduced and no drawings were made by the owner) is by calculating the change in capital.
The Calculation:
The formula used is:{Profit/Loss} = {Closing Capital} - {Opening Capital}
Since the closing capital is higher than the opening capital, it indicates that the business has earned a profit. If the closing capital were lower, it would have been a loss.
Answer verified by Quintessence Classes faculty — Karan Nagar, Srinagar.
