Fred Who Owns His Own Business Pays in an Extra

question 10

Multiple Choice

Fred who owns his own business pays in an extra £40000 to the business bank account and also transfers his car worth £15000 into the business. He then raises a loan from the bank of £20000 and agrees with the bank manager that he can have an overdraft facility of up to £15000. What is total equity and liabilities at the end of the year?

• A) Equity £40000 and liabilities £35000
• B) Equity £40000 and liabilities £20000
• C) Equity £55000 and liabilities £35000
• D) Equity £55000 and liabilities £20000

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Definitions:

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