1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

# Develop an Accounting Equation from the following transactions: ₹ (i) Mohan commenced business with cash 50,000 (ii) Purchased goods for cash 30,000 (iii) Purchased goods on credit 20,000 (iv) Sold goods (costing ₹ 10,000) for 12,000 (v) Bought furniture on credit 2,000 (vi) (vii) Paid cash to a creditor Salary paid 15,000 1,000

Open in App
Solution

## S. No. Transaction Assets = Liabilities + Capital Cash (Rs) + Stock (Rs) + Furniture (Rs) = Creditors (Rs) (Rs) (i) Mohan commenced business with cash 50,000 = 50,000 50,000 = 50,000 (ii) Purchased goods for cash – 30,000 + 30,000 = 20,000 + 30,000 = 50,000 (iii) Purchased goods on credit 20,000 = 20,000 20,000 + 50,000 = 20,000 + 50,000 (iv) Sold goods costing Rs 10,000 for Rs 12,000 12,000 + – 10,000 = 2,000 (profit) 32,000 + 40,000 = 20,000 + 52,000 (v) Bought furniture on credit 2,000 = 2,000 32,000 + 40,000 + 2,000 = 22,000 + 52,000 (vi) Paid cash to a creditor – 15,000 = – 15,000 17,000 + 40,000 + 2,000 = 7,000 + 52,000 (vii) Salary Paid – 1,000 = – 1,000 (expenses) 16,000 + 40,000 + 2,000 = 7,000 + 51,000 Assets = 16,000 + 40,000 + 2,000 = Rs 58,000 Liabilities = Rs 7,000 Capital = Rs 51,000

Suggest Corrections
96
Join BYJU'S Learning Program
Related Videos
Honorarium
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program