Question

Explain the concept of accounting equation and also give the effect of 5 transactions on accounting equation

Answer 1

The concept of accounting equation is double entry
for example
1. If machinery purchased the entry is
Machinery a/c Dr
Cash a/c
2.if salaries paid
Salaries a/c Dr
Cash a/c
3.if interest received for deposit
cash a/c Dr
income a/c
4.if loan received
bank/cash a/c Dr
loan a/c
5.if shares issued for cash
cash a/c Dr
share capital a/c