Question

Show the effect of various transactions on accounting equation

a) Subhash introduced cash rs. 3,00,000 to start business

b) Goods purchased rs. 60,000 on credit

c) He withdrew Rs. 50,000 from business for personal use

d) Cash paid to creditors rs. 40,000

e) Furniture purchased in cash rs. 25,000

f) Provide interest on capital rs. 3,0​

Answer 1

Answer:

a. cash account 300000 = capital account 300000

b. stock account 60000 = creditors account 60000

c. cash account minus 50000 = capital account minus 50000

d. cash account minus 40000 = creditors account minus 40000

e. cash account minus 25000 = furniture account 25000