Question

From the following transactions prepare Accounting Equation. (5 marks) I. Sunil started business with cash 25,000 2. Opened a bank account by depositing 10,000. 3. He purchased furniture for Rs. 7000. 4. He paid rent Rs.1000. 5. He sold to Shyam on credit goods costing Rs. 6000 for Rs. 9000​

Answer 1

Explanation:

capital = 25000

Asset = bank + furniture + debtors

= 10000 + 7000 + 9000 = 26000

liability = Rent

= 1000

Accounting equation,

Asset = capital + liability

26000= 25000 + 1000

26000 = 26000