Question

Analyse the effect of each transaction and prove that the accounting equation always remains balancec:

1. Introduced Rs 800000 as cash and Rs 50000 by stock.

2. Purchased plant for Rs 300000 by paying Rs 15000 in cash and balance at a later date.

3. Deposited Rs 600000 into the bank.

4. Purchased office furniture for Rs 100000 and made payment by cheque.

5. Purchased goods worth Rs 80000 for cash and Rs 35000 on credit.

6. Goods amounting to Rs 45000 was sold for Rs 60000 on cash basis.

7. Goods costing Rs 80000 was sold for Rs 125000 on credit basis.

8. Cheque issued to the supplier of the goods worth Rs 35000.

9. Cheque received from customer amounting to Rs 75000.

10 Withdrawn by the owner for personal use Rs 25000.

Answer 1

1.cash acc dr. 800000
stock acc.dr.50000
to capital acc. 850000
2.plant acc dr. 300000
to cash acc. 15000
to supplier acc.285000
3.bank acc. dr. 600000
to cash acc. 600000
4. office furniture acc. dr. 100000
to bank account 100000
5. purchases acc. dr.115000
to cash acc. 80000
to supplier 35000
6. cash acc. dr.60000
to sales acc. 60000
7. debtor dr.125000
to sales acc. 125000
8. supplier dr. 35000
to bank acc. 35000
9. bank account dr.75000
to customer 75000
10. drawings acc. dr 25000
to cash account 25000