Question

Use Accounting Equation to show the effect of the following transactions of M/s Ram Traders (a)Started business with cash Rs.1,20,000 (b)Purchased goods for Rs.10,000 (c)Rent Received Rs.5,000 (d)Salary outstanding Rs.2,000 (e) Prepaid insurance Rs.1,000 (f)Received Interest Rs.700 (g)Sold goods for cash(costing Rs.5,000) Rs.7,000 (h)Goods destroyed by Fire Rs.500.

Answer 1

Answer:

1) cash ac dr to capital ac

2)purchases ac to cash ac

3)cash ac to rent ac

4)salary ac to outstanding salary ac

h) loss by fire ac to purchases ac