Question

Prove that accounting equation is satisfied in all the following cases:
​(a) Commenced business with cash ₹ 50,000.
​(b) Paid rent ₹ 4,000 including ₹ 1,000 in advance.
​(c) Bought goods for cash ₹ 30,000 and on credit ₹ 20,000.
​(d) Sold the goods bought on credit for ₹ 25,000.
​(e) Purchased furniture worth ₹ 10,000 for office use and for ₹ 5,000 for domestic use.

Answer 1

Answer:

Transactions

Assets

=

Liabilities

+

Capital

Cash

(Rs)

+

Bank

(Rs)

+

Stock

(Rs)

=

Creditors

(Rs)

(i)Started business with cash

45,000 = 45,000

(ii)Opened a Bank Account with a deposit

45,000 – 4,500 +4,500 = 40,500 + 4,500 = 45,000

(iii)Bought goods from M/s. Sun & Co.

11,200 = 11,200

40,500 + 4,500 + 11,200=11,200+45,000

Total Assets=Cash + Bank + Stock

40,500 + 4,500 + 11,200

=56,200

Liabilities=11,200

Capital=45,000

Answer 2

Answer:

Cash=capital

50000=50000

cash + prepaid exp. = capital

-4000 + 1000           = -3000

 

cash + stock = creditor

-30000 + 50000 = 20000

cash + stock

25000 + ( -25000 )

cash + stock + furniture

-15000+5000+10000

Explanation:

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