Use accounting equation to show the effect of the following transactions of M/s Royal Traders: Rs (a) Started business with cash 1,20,000 (b) Purchased goods for cash 10,000 (c) Rent received 5,000 (d) Salary outstanding 2,000 (e) Prepaid Insurance 1,000 (f) Received interest 700 (g) Sold goods for cash (costing Rs 5,000) 7,000 (h) Goods destroyed by fire 500
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Answered by
7
1. cash a/c dr. 1,20,000
to capital a/c 1,20,000
2. purchased a/c dr. 10,000
to cash 10,000
3. cash/bank a/c dr. 5,000
to rent 5,000
4. outstanding a/c dr. 2000
to salary a/c 2000
5.prepaid insurance /
in advance 1000
to insurance 1000
6.cash / bank a/c dr 700
to interest 700
7. cash a/c dr 7000
to sale 5000
to discount 2000
8. distroyed by fire 500
to purchase 500
to capital a/c 1,20,000
2. purchased a/c dr. 10,000
to cash 10,000
3. cash/bank a/c dr. 5,000
to rent 5,000
4. outstanding a/c dr. 2000
to salary a/c 2000
5.prepaid insurance /
in advance 1000
to insurance 1000
6.cash / bank a/c dr 700
to interest 700
7. cash a/c dr 7000
to sale 5000
to discount 2000
8. distroyed by fire 500
to purchase 500
Answered by
3
Assets: Cash Rs.1,22,000 + Stock Rs.4500 = Liabilities : Outstanding Expenses Rs.2,000 + Capital Rs.1,24,500
Hint. Goods destroyed by fire in decrease in stock and decrease in capital
Answered by
2
Assets: Cash Rs.1,22,000 + Stock Rs.4500 = Liabilities : Outstanding Expenses Rs.2,000 + Capital Rs.1,24,500
Hint. Goods destroyed by fire in decrease in stock and decrease in capital
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