Question

Q16 Show Accounting Equation

(1) Started business with cash 20,000

(2) Purchased goods for cash 4000


(3) Rent paid 500

(4) Sold goods to Sham 3000


(5) Machinert purchased 2000
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Answer 1

1. Asset side- 20,000 under cash and on liability side-20,000 under capital
2. Asset side-4000 under goods and deduct 4000 from cash
3. Asset side- deduct 500 under cash and on liability side deduct 500 under capital
4. Asset side- deduct 3000 from goods and add 3000 under cash
5. Asset side- 2000 under machinery and deduct 2000 from cash