Question

use accounting equation to show the effect of the following transaction on the assets and liabilities and capital and also prepare a balance sheet :

1 st Commerced business with cash. 50,000
2nd Purchased goods for cash. 20,000
3rd Purchased goods on credit . 30,000
4th Sold goods for cash ( costing Rs 30,000 ).
40,000
5th Paid rent 500
6th Rent outstanding.
100
7th Purchased plant on credit
5,000
8th Purchased typewriter for personal use 5,000
9th Purchased building for cash. 20,000​

Answer 1

Answer:

When you buy office supplies for your company, the purchase affects the supplies expense account (equity subaccount) and the cash account (asset). Record the purchase by increasing the supplies expense account with a debit and decreasing the cash account with a credit.