Question

7 If tatal assets of a business are RS. 10,00,000 and capital is RS.4,00,000, calculate creditors?
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Answer 1

Explanation:

Assets = Rs. 1,80,000; Net worth or Owner's Equity = ?; Outside Liability = Rs. 50,000

The accounting equation is:

Assets = Outside Liability + Owner's Equity or Net Worth 

Rs. 1,80,000 = Rs. 50,000 + Owner's Equity or Net Worth 

Owner's Equity or Net Worth = Rs. 1,80,000 - Rs. 50,000

Owner's Equity or Net Worth = Rs. 1,30,000