Question

10. Prove that the Accounting Equation is satisfied in all the following transactions of Sures.
Also prepare a Balance Sheet.
(i) Commenced business with cash * 60,000.
(ii) Paid rent in advance 500.
(iii) Purchased goods for cash 30,000 and credit * 20,000.
(iv) Sold goods for cash 30,000 costing *20,000.
(U) Paid salary * 500 and salary outstanding being * 100.
(vi) Bought motorcycle for personal use 5,000.
[Assets: 84,500 = Liabilities: *20,100 + Capital: 64,400
11. Show the effect of the following transactions on assets, liabilities and capital using th
Accounting Equation. Also prepare a Balance Sheet:
(i) Started business with cash * 60,000.
(ii) Rent received * 2,000.
(iii) Accrued interest 500.
(iv) Commission received in advance * 1,000.
(u) Amount withdrawn 5,000.
[Assets: Cash 58,000 + Accrued interest 500 = Liabilities: Commissio
Received in Advance P1,000 + Capital: 57,500,​

Answer 1

Answer:

1. cash a/c dr. 60,000

to capital a/c 60,000

2.rent in advance a/c 500

to cash a/c 500

3. accured interest a/c dr 500

to cash a/c 500

4. cash a/c dr. 30,000

to sales a/c 30,000

5. salary a/c dr.500

to cash a/c 500

salaries a/c dr 100

to outsanding salary a/c 100

6. Drawings a/c dr. 5,000

to cash a/c 5,000