prepare the accounting equation to show the effect of the following transactions in the books of Mr. Atul.
Started business with cash on 1st April 2019 Rs 10, 00,000.
Purchase goods for cash Rs. 2, 00,000.
Life insurance premium paid in cash Rs.50, 000.
purchase goods on credit Rs.100000
paid rent Rs.20000
sold goods to Ram at cost price Rs.20000
sold goods for cash( cost price Rs.4000) for Rs.6000
Payment to creditors Rs.86000.
Purchased machinery Rs.5, 00,000.
Paid 3 months advance fire insurance premium Rs.Rs.1500.
Bought a computer for office use from Shyam worth Rs.30000. He was paid Rs.10, 000 and for the rest of the amount the bill was accepted.
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Answer: accounting equation is assets minus liabilities is equal to capital
Explanation:
Take for an example with the statement of financial position we start by adding our assets then move on to subtracting liabilities and we then get our capital
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