Question

6. Prove that accounting equation is satisfied in all the following cases
is liability]
(i) Commenced business with cash 50,000
(ii) Paid rent * 4,000 including 1,000 as advance.
(iii) Bought goods for cash 30,000 and on credit * 20,000.
(iv) Sold the goods bought on credit for * 25,000
(U) Purchased furniture worth 10,000 for office uses and for 25,000
for personal use.
[Ans. Cash 26,000 + Stock 30,000 + Furniture 10,000 + Prepaid Rent
1,000 = Creditors * 20,000 + Capital 47,000.]
[Hint. Rent 3,000 is expense (loss), *1,000 Prepaid (Asset) & Cash will
reduce by 4,000.]​

Answer 1

Answer:

Assets : Cash Rs.26,000 + Prepaid Exp. Rs.1,000 + Stock Rs.30,000 + Furniture Rs.10,000 = Liabilities : Creditors Rs.20,000 + Capital Rs.47,000.

Explanation:

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