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 as 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 5000 domestic use.
Answers
Answer:
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Explanation:
What will be effect of the following on the Accounting Equation?
(i) Started business with cash ₹ 45,000
(ii) Opened a Bank Account with a deposit of ₹ 4,500
(iii) Bought goods from M\s. Sun & Co. for ₹ 11,200
ANSWER:
S. No.
Transactions
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Bank
(Rs)
+
Stock
(Rs)
=
Creditors
(Rs)
(Rs)
(i)
Started business with cash
45,000
=
45,000
45,000
=
45,000
(ii)
Opened a Bank Account with a deposit
– 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
=
Rs
56,200
Liabilities
=
11,200
Capital
=
45,000
Page No 5.17:
Question 2:
Show the Accounting Equation for the following transactions:
₹
(i) Gopinath started business with cash 25,000
(ii) Purchased goods from Shyam 10,000
(iii) Sold goods to Sohan costing ₹ 1,800 1,500
(iv) Gopinath withdrew from business 5,000What will be effect of the following on the Accounting Equation?
(i) Started business with cash ₹ 45,000
(ii) Opened a Bank Account with a deposit of ₹ 4,500
(iii) Bought goods from M\s. Sun & Co. for ₹ 11,200
ANSWER:
S. No.
Transactions
Assets
=
Liabilities
+
Capital
Cash
(Rs)
+
Bank
(Rs)
+
Stock
(Rs)
=
Creditors
(Rs)
(Rs)
(i)
Started business with cash
45,000
=
45,000
45,000
=
45,000
(ii)
Opened a Bank Account with a deposit
– 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
=
Rs
56,200
Liabilities
=
11,200
Capital
=
45,000
Page No 5.17:
Question 2:
Show the Accounting Equation for the following transactions:
₹
(i) Gopinath started business with cash 25,000
(ii) Purchased goods from Shyam 10,000
(iii) Sold goods to Sohan costing ₹ 1,800 1,500
(iv) Gopinath withdrew from business 5,000