Question

prove that the accounting equation is satisfied in all the following transactions:
1) started business with cash Rs.100000.
2)purchase goods on credit Rs.4000.
3) purchase good for cash Rs.1000.
4) withdraw cash for private use Rs.850.

Answer 1

Asset= Liability+ capital

  cash           stock                                      capital      Liability

1. 1,00,000                                                    100,000

2.                     4000                                                       4000

3.  (1000)          1000

4.    (850)                                                          (850)

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     98,150         5,000               =                     99,150        4,000