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

Show the effect of the following transactions on Assets, Liabilities and Capital through accounting equation:

Rs

(a)

Started business with cash

1,20,000

(b)

Rent received

10,000

(c)

Invested in shares

50,000

(d)

Received dividend

5,000

(e)

Purchase goods on credit from Ragani

35,000

(f)

Paid cash for house hold Expenses

7,000

(g)

Sold goods for cash (costing Rs 10,000)

14,000

(h)

(i)

Cash paid to Ragani

Deposited into bank

35,000

20,000

Open in App
Solution

S.No.

Explanation

Assets

=

Liabilities

+

Capital

Cash

+

Stock

+

Investment

+

Bank

Creditors

(a)

Increase in cash

1,20,000

Increase in capital

1,20,000

­­­­­­

1,20,000

+

=

NIL

+

1,20,000

(b)

Increase in cash

10,000

Increase in capital (Income)

=

10,000

1,30,000

=

NIL

+

1,30,000

(c)

Decrease in investment

50,000

Decrease in cash

(50,000)

=

80,000

+

50,000

=

NIL

+

1,30,000

(d)

Increase in cash

5,000

Increase in capital (Income)

5,000

85,000

+

50,000

=

NIL

+

1,35,000

(e)

Increase in stock

35,000

Increase in creditor (Ragani)

35,000

85,000

+

35,000

+

50,000

=

35,000

+

1,35,000

(f)

Decrease in capital

(7,000)

Decrease in cash

(7,000)

78,000

+

35,000

+

50,000

=

35,000

+

1,28,000

(g)

Increase in cash

14,000

Decrease in stock

(10,000)

Increase in capital (Profit)

4,000

92,000

+

25,000

+

50,000

=

35,000

+

1,32,000

(h)

Decrease in creditors (Ragani)

(35,000)

Decrease in cash

(35,000)

57,000

+

25,000

+

50,000

=

NIL

+

1,32,000

(i)

Decrease in cash

(20,000)

Increase in bank

20,000

37,000

+

25,000

+

50,000

+

20,000

=

NIL

+

1,32,000


flag
Suggest Corrections
thumbs-up
12
similar_icon
Similar questions
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Accounting Treatment - I
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon