Question

5. Show an accounting equation on the basis of the following transactions-
(I) Started business with cash Rs. 10,000
(ii) Paid rent in advance Rs. 300
(III) Purachased goods for cash Rs. 5000 and credit Rs. 2000.
(IV) Sold goods for cash 8000 costing 4000.
(V) Bought motorcycle for personal use 3000.
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Answer 1

Answer:

in first transaction

first we have to make cash coloumn in assets side and then in cash coloumn we have to enter amt 10000 and in capital side also same amt .

in second transaction

first we have to make prepaid rent coloumn in the asset side after cash then enter amt below the prepaid rent which 300 and at last minus 300 from capital.

we also know that after every transaction we have to write down answer

in third transaction

first we have to make another coloumn in the asset for goods and then write amt below it which is 5000 and minus 5000 from cash ac in assets coloumn then in liability coloumn we have to add the 2000 and after that 2000 will be added to goods side also

in fourth transaction

first we have to plus 8000 in the cash side then minus 4000 in goods side and then we have to add 4000 in capital side as it is a profit.

in fifth transaction

first we have to minus 3000 from cash side as it is a drawing and then minus 3000 from capital side

Thanks