Question

how the accounting equation is satisfied in following cases:-

1) Mahesh started business with cash Rs 80,000 and goods Rs 40,000.

2) Sold half of the goods at a profit of 25% to Ramesh.

3) Sold Remaining goods at a loss of 10% for cash.

4) Paid salary Rs 3,00​0​

Answer 1

Answer:

The firm gets Rs.4000 as additional income therefore making it a direct income so we credit it.

Explanation:

From the above question,

Given:

Cash A/c  Dr      48000

To Sales A/c                      40000

To P&l A/c                         8000

1) Mahesh started business with cash Rs 80,000 and goods Rs 40,000.

2) Sold half of the goods at a profit of 25% to Ramesh.

3) Sold Remaining goods at a loss of 10% for cash.

4) Paid salary Rs 3,00​0​

Cash a/c. Dr. 80,000

Purchase a/c. Dr. 40,000

Furniture a/c. Dr 20,000

To Capital a/c 1,40,000

Here in this case as cash is being increased, we will debit it as it's a current asset. According to the modern accounting rule, when assets are increased, they should be debited. Sales are credit natured objects so we credit the actual sale amount being 40000.

As the goods are sold for a 20% higher cost, which is Rs.4000 the P&L account must be credited as incomes should be credited. The firm gets Rs.4000 as additional income therefore making it a direct income so we credit it.

For more such related questions : https://brainly.in/question/1572265

#SPJ1