Question

What will be the effect of the following on the accounting equation?
i) Commenced business with cash Rs.80,000
ii) Bought furniture Rs.4,500
iii) Purchased goods for Rs.50,000
iv) Additional capital introduced Rs.50,000
v) Paid into bank Rs.40,000
vi) Sold goods value of Rs.27,500 for Rs.30,000

Answer 1

Answer:

Every Business transaction which is to be considered for accounting i.e. every Accounting transaction, has its effect on the fundamental accounting equation. Each transaction alters the expressions forming the equation in such a way that the accounting equation is satisfied after every such alteration