Question

prepare accounting equation on the basis of the basis of the following A) karan started business with cash rs 160000 b) he purchased furniture for cash rs 16000 C) he paid rent rs 1600 D) he purchased goods on credit rs 24000 E) he sold goods costing rs 16000 for rs 40000for cash

Answer 1

Answer:

Based on the Accounting Equation, effect of the following items on the Accounting Equation is as follows:  

 

Transaction

 

      Assets =  Liabilities + Capital

Cash Goods Furniture Liabilities Capital

1. Started business with Cash 80,000  

+80000  

   +80,000

2. Purchased goods 70,000 on credit   +70,000   +70,000  

3. Withdrew cash for personal use 20,000

-20,000        -20,000

4. Furniture purchased in cash for 15,000

-15,000   +15,000    

5. Salaries paid 3,000 in cash

-3,000       -3000

Explanation: