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
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Explanation:
capital = 25000
Asset = Bank + Furniture + debtors
= 10000 + 7000 + 9000
= 26000
liability = rent
= 1000
Accounting equation,
Asset = liability + capital
26000 = 1000 + 25000
26000 = 26000
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