As per the Duality principle calculate the total outsider’s equity if the raw materials cost Rs. 5000, machine cost Rs. 50,000, Furniture used in the firm cost Rs. 20,000, cash at bank is Rs. 30,000 and the owner’s equity is Rs. 70,000. a) Rs.35,000 b) Rs. 1,75,000 c) Rs. 70,000 d) Rs. 1,40,000
Answers
Answer:
a ) 35,000
Explanation:
liablities= Assets - Capital
=(5000+50000+20000+30000)-70000
=105000-70000
=35000
Answer:
The correct answer to the question is option (a) Rs. 35,000.
Explanation:
The duality principle in accounting states that every transaction has two aspects - a debit aspect and a credit aspect, which are equal in value. In other words, the sum of all debits must be equal to the sum of all credits in any transaction. This principle applies to all types of financial statements, including the balance sheet.
The balance sheet is a statement that shows the financial position of a company at a particular point in time. It lists all the assets, liabilities, and owner's equity of the company. According to the duality principle, the total value of assets must be equal to the total value of liabilities and owner's equity.
Using this principle, we can calculate the total outsider's equity by adding up the liabilities and subtracting the owner's equity from the total.
Given:
Raw materials cost = Rs. 5000
Machine cost = Rs. 50,000
Furniture cost = Rs. 20,000
Cash at bank = Rs. 30,000
Owner's equity = Rs. 70,000
Total assets = Rs. 5000 + Rs. 50,000 + Rs. 20,000 + Rs. 30,000 = Rs. 1,05,000
Total liabilities and outsider's equity = Total assets - Owner's equity = Rs. 1,05,000 - Rs. 70,000 = Rs. 35,000
Therefore, the correct answer to the question is option (a) Rs. 35,000.
Learn more about Duality Principle :
https://brainly.in/question/22107966
#SPJ2