Question

Question 7.
Prepare an Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000.
(ii) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000.
(iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%.

Answer 1

(I) cash a/c. Dr. 100000

to capital a/c. 100000

(being business started with cash)

(ii) purchase a/c. Dr. 50000

to cash a/c. 20000

to creditor a/c. 30000

(being goods purchased for cash and on credit)

(iii) cash a/c. Dr. 10000

to sales a/c. 8000

to profit and loss a/c. 2000

(being good sales in cash)

debtor a/c. Dr. 15000

to sales a/c. 12000

to profit and loss a/c. 3000

(being goods sold on credit)

Answer 2

The accounting equation is shown below:

Explanation:

The accounting equation is as:

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