Question

Prepare accounting eqaution startedbusinesswith cash 75000 and goods 25000 paid for rent 2000

Answer 1

Accounting equation

Asset = liabilities + capital

1)started business with cash 75000 and goods 25000

Cash + stock     =  capital

75000+ 25000 = 1,00,000

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2)paid for rent 2000

Cash + stock   = capital

75000 + 25000 = 1,00,000

(2000) + 25000 = (2000)

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73000 + 25000 = 98000

# rent is expense to the company which should be deducted with capital