Question

Show the effect of the following transactions on the Accounting Equation:

i. Started business with cash Rs. 50,000, Stock Rs. 30,000, Furniture Rs. 10,000 and Building Rs. 80,000.

ii. Goods costing​ Rs 25000 sold on credit at a loss of 10%.

Answer 1

Answer:

1. Cash a/c - Dr 50,000

Stock a/c - Dr 30,000

Furniture a/c- Dr 10,000

Building a/c - Dr 80,000

To capital a/c - 1,70,000

Explanation:

Being business started with cash, stock, furniture and building all will treated as capital hence credited to capital account