Question

Q1:(Preparation of accounting equation)
Mr. X commenced his business on 1st April, 2008 by introducing capital of Rs. 50,000. During the
year, following transactions had taken place-
Amount Rs.
(a) Bought Machine for cash. ` 20,000
(b) Purchased goods for 24,000
(c) Sold goods (costing Rs. 9,500) to Om for cash. 20,000
(d) Purchased goods from Azhar. 14,000
(e) Introduced additional capital. 16,000
(f) Commission received in advance. 2,000
(g) Paid to Creditors Rs. 10,500 in full settlement.
(h) Bought Computer for his personal use. 10,000
(i) Rent paid for the year. 10,000
(j) Payment for stationery 400
(k) Sold goods (costing Rs 12,000) for Rs 16,000. Out of
which Rs. 2,000 received in cash.
Show the above transactions in accounting equations.

Answer 1

a. Machine Account Dr.20,000

To Cash Rs.Cr 20,000

b. Purchases Account Dr. 24,000

To Cash Rs. Cr.24,000

c. Cash account Dr.20,000

To Sales Rs. 20,000

d Purchases account Dr. 14,000/-

To Azhar Rs. 14,000/-

E. Cash account Dr.16,000/-

To Capital Rs. 16,000

f. Bank account 2,000

To Accrued Income

g. Creditors account Dr.10,500

To Bank 10,500

h. Computer account Dr.10,000

To Cash Rs. 10,000

i. Rent account Dr. 10,000

To Cash Rs. 10,000.

j .Stationery Rs. 400

To Cash Rs. 400

k Customer account Dr. 16,000

To Sales Account Rs. 16,000

k. Bank account Dr. 2,000

To Customer Rs.2000