Question

Show the effect of the following transactions on Assets, Liabilities and Capital
ILLUSTRATION 4.
through accounting equation :
th
(a) Started business with cash
(6) Rent
received
(c) Invested in shares
(d) Received dividend
(e) Purchased goods on credit from Ragani
0 Paid cash for household expenses
(g) Sold goods for cash (costing 10,000)
(h) Cash paid to Ragani
(i) Deposited into bank
(Solution on Next Page)
₹
1,20,000
10,000
50,000
5,000
35,000
7,000
14,000
35,000
20,000​

Answer 1

Answer:

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Answer 2

Answer:

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Page No 6.25:

Question 1:

Prepare Accounting Equation from the following:-

(₹)

1.

Sandeep started business with Cash

1,00,000

2. Purchased furniture for cash 5,000

3. Purchased goods for cash 20,000

4. Purchased goods on credit 36,000

5. Paid for rent 700

6.

Goods costing ₹ 40,000 sold at a profit of 20% for cash

Answer:

ACCOUNTING EQUATION

S. No. Transaction Assets = Liabilities + Capital

Cash + Furniture + Stock = Creditors

(i) Sandeep started business with cash 1,00,000 + 1,00,000

1,00,000 = + 1,00,000

(ii) Purchased furniture for cash –5,000 +5,000

95,000 + 5,000 = + 1,00,000

(iii) Purchased goods for cash –20,000 +20,000

75,000 + 5,000 + 20,000 = + 1,00,000

(iv) Purchased goods on credit +36,000 +36,000

75,000 + 5,000 + 56,000 = 36,000 + 1,00,000

(v) Rent paid -700 –700

74,300 + 5,000 + 56,000 = 36,000 + 99,300

(vi) Goods costing Rs 40,000 sold at a profit of 20% for cash +48,000 -40,000 +8,000

1,22,300 + 5,000 + 16,000 = 36,000 + 1,07,300