Question

7.
Prepare the accounting equation on the basis of the following:
(i) Started business with cash Rs. 70,000.
(ii) Credit purchases of goods Rs. 18,000
(iii) Payment made to creditors in full settlement Rs. 17,500
(iv) Purchases of machinery for cash Rs. 20,000​

Answer 1

Answer:

1. cash ac. dr. 70000

to capital ac. 70000

2. purchase ac. dr. 18000

to creditor. 18000

3. creditor ac. dr. 18000

to cash ac. 17500

to discount ac. 500

4. machinery ac. dr. 20000

to cash. 20000

Total. 126000rs 126000rs