Question

use accounting equation to show the effect of the following transaction on assets l, liabilities and capital
1. sam commenced business with cash Rs 100000
2. purchased goods on credit Rs 20000
3. withdrew cash from business for personal use Rs 5000
4. sold goods for cash (cost Rs 10000) Rs 15000
5. recieved received commission Rs 3000
6. paid to creditors Rs 13000
7. paid rent Rs 4000 and outstanding Rs 1000​

Answer 1

Explanation:

1. Cash : +100,000; Capital : +100,000

2. Stock : +20,000; Creditors : +20,000

3. Cash : (-5,000); Capital : (-5,000)

4. Cash : +15,000 Stock : (-10,000); Capital +5,000

5. Cash : +3,000; Capital : +3,000

6. Cash : (-13,000); Creditors : (-13,000)

7. Cash : (-4,000); Outstanding Rent : +1,000 Capital : (-4,000) (-1,000)