A means of dividing profits which uses as basis the amount of capital invested and the time during which such capital is actually used by the businessGroup of answer choicesOriginal capitalAverage capitalEnding capitalBeginning capital
Question
A means of dividing profits which uses as basis the amount of capital invested and the time during which such capital is actually used by the businessGroup of answer choicesOriginal capitalAverage capitalEnding capitalBeginning capital
Solution
The method of dividing profits that uses the amount of capital invested and the time during which such capital is actually used by the business as a basis is known as the Average Capital method.
Here's a step-by-step explanation:
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Determine the amount of capital invested at the beginning and end of the period.
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Calculate the average capital by adding the beginning and ending capital and dividing by 2.
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Determine the time period during which the
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