Question

Transaction of Mohan traders are given below. Show the effects of these transaction on assets liabilities and capital with the help of accounting equation
A) business starts with cash € 1,00,000
B) cash purchase € 50,000
C) cash sale of € 60,000
D) purchase furniture for cash € 5,000
E) paid rent € 4,000
F) bought from ratan € 8,000

Answer 1

Explanation:

A) Cash transaction

• Cash, capital
• Asset, capital
• increases, increases
• B) Cash transaction
• Cash ,stock
• asset, asset
• Decreases, Increases
• C) Cash transaction
• Cash, stock
• Asset, Asset
• Increases, Decreases
• D) Cash transaction
• Cash, furniture
• Asset, asset
• Decreases, increases
• E) Cash transaction
• Cash, Rent
• Asset, Expense
• Decreases, Decreases
• F) Cash transaction
• cash, stock
• asset, asset
• decreasess, Increases