Question

Preparing accounting equation on the basic following bought furniture on credit 7000​

Answer 1

assets = liability + capital

furniture creditors

7000 7000

furniture is purchase on credit so furniture will increase by 7000 and creditors will also increased by 7000

Answer 2

{Hello Supriya}

(Answer)

As furniture bought means furniture is assets for business so it will increase.

Whereas transaction are based on credit so in future we have to pay the amount to creditor. So it is liability for business.

[ Accounting Equation ]

Assets = Liabilities + Capital

7000 =7000 + 0

7000 = 7000

{Hope it helps}

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Assets = Liabil