Question

If the owners equity is Rs. $80,000$ and external liability Rs. $40,000$, Cash in hand Rs. $20,000$, the other assets of the firm will be ____________.

• A. Rs. $1,00,000$
• B. Rs. $1,20,000$
• C. Rs. $80,000$
• D. Rs. $1,40,000$

Answer 1

The correct option is A Rs. $1,00,000$

Accounting equation:

Owners Equity+External liability=Current Assets+ Fixed Assets

Cash is part of Current Assets

that means

Owners Equity+External liability=Cash+other assets

Rs.80000+Rs.40000=Rs.20000+Other current assets

Hence other current assets will be Rs.100000