Question

Prove that the Accounting Equation is satisfied in all the following transactions:

(i) Started business with cash Rs.1,00,000

(ii) Purchased goods on credit Rs.4,000

(iii) Purchased goods for cash Rs.1,000

(iv) Withdrew cash for private use Rs.850​

Answer 1

Answer:

1.cash 100000 capital 100000

new eqn

100000=100000

2.stock 4000 creditors 4000

new eqn

100000+4000=4000+100000

3.cash(-)1000 stock 1000

new eqn

99000+4000+1000=4000+100000

4.cash(-)850 capital(-)850

new eqn

98850+4000+1000=4000+99150

103850 =103850