Question

pls ..give me some idea in accounting equation.how to solve.i know the basic terms in assets and liabilities​

Answer 1

Answer:

How to solve a basic accounting equation?

Here is an example using the formula Assets = Liabilities + Equity or Capital Problem: Find out how accounting equation is calculated after taking into consideration each of the following transactions in the books of Mr. A

Started business with capital $100,000

Solution Capital (100,000) + Liabilities (0) = Assets (cash = 100,000)

Bought furniture $25, 000

Solution Capital (100,000) + Liabilities (0) = Assets (Cash = 75,000 + Furniture = 25,000)

Bought goods for cash $20, 000

Solution Capital (100, 000) + Liabilities (0) = Assets (Cash = 55,000 + Furniture = 25,000 + Goods = 20,000)

Brought goods from Mr. Nelson on credit $5,000

Solution Capital (100, 000) + Liabilities (Nelson = 5,000) = Assets (Cash = 55,000 + Furniture = 25,000 + Goods = 25,000)

Sold goods for cash for $15, 000

Capital (100,000) + Liabilities (Nelson = 5,000) = Assets (Cash = 70,000 + Furniture = 25,000 + Goods = 10,000)

Sold goods to Mr. William on credit $8,000

Solution, Capital (100,000) + Liabilities (Nelson = 5,000) = Assets (Cash = 70,000 + Furniture = 25,000 + Goods = 2,000 + William = 8,000)

Paid cash to Nelson $4,000

Solution, Capital (100,000) + Liabilities (Nelson = 1,000) = Assets (Cash = 66,000 + Furniture = 25,000 + Goods = 2,000 + William = 8,000)

Received cash from William $5,000

Solution Capital (100,000) + Liabilities (Nelson = 1,000) = Assets (Cash = 71,000 + Furniture = 25,000 + Goods = 2,000 + William = 3,000)