Question

Show the effect of following transactions on the accounting equation:
a) Kiran commenced business with cash 1,00,000 and bank balance 60.000
(ii) Salary paid by cheque 18,000,
Gin), Salary due but not paid 12,000.
Interest paid for next year by cheque 16,000,
(v) Rent received 15,000.
(viRent due but not received * 7,000.
vii) Commission received in advance for next year 10,000,
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Answer 1

Answer:

1. Cash a/c Dr 100000

Bank a/c Dr 60000

To Capital a/c 160000

Being business commenced with cash and bank balance

2. Salary a/c Dr.18000

To Bank a/c 18000

Being salary paid by Chq

3. Salary a/c Dr 12000

To salary payable 12000

Being salary due not paid

4. Interest paid in adv a/c Dr 16000

To Bank 16000

Being int paid in advance

5. Cash/Bank Dr 15000

To Rent  15000

Being rent received either in cash or by chq

6. Rent receivable a/c Dr 7000

To Rent 7000

Being rent due but not received

7. Cash / Bank a/c Dr 10000

To Commission recd in adv 1000

Explanation: