Question

Question 6.
Prepare an Accounting Equation and Balance Sheet on the following basis:
(i) Ajeet started business ₹ 20,000.
(ii) He purchased furniture for ₹ 2,000.
(iii) He paid rent of ₹ 200.
(iv) He purchase goods on credit ₹ 3,000.
(v) He sold goods (cost price ₹ 2,000) for ₹ 5,000 on cash.

Answer 1

(I) cash a/c. Dr. 20000

to capital a/c. 20000

(being business started with cash)

(ii) furniture a/c. Dr. 2000

to cash a/c. 2000

(being furniture purchase in cash)

(iii)rent a/c. Dr. 200

to cash a/c. 200

(being rent paid in cash)

(iv) purchase a/c. Dr. 3000

to creditor a/c. 3000

(being goods purchase on credit)

(v) cash a/c. Dr. 5000

to sales a/c. 2000

to profit and loss a/c. 3000

(being goods sold in cash)

Answer 2

Explanation:

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