Furniture is a liabilty to the business.
Transactions of M/s. Vipin Traders are given below.
Show the effects on Assets, Liabilities and Capital with the help of accounting Equation.
Rs
(a)
Business started with cash
1,25,000
(b)
Purchased goods for cash
50,000
(c)
Purchase furniture from R.K. Furniture
10,000
(d)
Sold goods to Parul Traders (costing Rs 7,000 vide bill no. 5674)
9,000
(e)
Paid cartage
100
(f)
Cash Paid to R.K. furniture in full settlement
9,700
(g)
Cash sales (costing Rs 10,000)
12,000
(h)
Rent received
4,000
(i)
Cash withdrew for personal use
3,000
'Capital is a liability for the business'.Explain this statement with the principle applied.
Or
Explain the business entity principle with the help of an example.