Question

show the accounting equation on the basis of the following transection: 1-arjun started business with cash 80,000. 2-purchased goods for cash 30,000. 3-sold goods Costing 20,000 at a profit of 25% 10,000. 4- purchased goods on credit 10,000. 5-withdraw cash for private use 5,000​

Answer 1

1. Cash A/C Dr.

To Capital A/C

(started business with cash)

2. Purchase A/C Dr.

To Cash A/C

(goods purchased for cash )

3.Cash A/C Dr.

To Sales A/C

(good sold at a profit of 25%)

4. purchase A/C Dr.

To Account payable A/C

( purchase good on credit )

5. Drawing A/C Dr.

To cash A/C

(cash withdraw for private use)