Question

Prepare Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000 and Goods ₹ 20,000.
(ii) Sold goods worth ₹ 10,000 for cash ₹ 12,000.
(iii) Purchased furniture on credit for ₹ 30,000.

Answer 1

S. No.	Transaction	Assets					=	Liabilities	+	Capital
		Cash (Rs)	+	Stock (Rs)	+	Furniture (Rs)	=	Creditors (Rs)		(Rs)
(i)	Started business with cash Rs 1,00,000 and Goods Rs 20,000	1,00,000	+	20,000			=			1,20,000
		1,00,000	+	20,000			=			1,20,000
(ii)	Sold goods worth Rs 10,000 for cash Rs 12,000	12,000		– 10,000			=		+	2,000
		1,12,000	+	10,000			=			1,22,000
(iii)	Purchased furniture on credit for Rs 30,000					30,000	=	30,000
		1,12,000	+	10,000	+	30,000	=	30,000	+	1,22,000

Assets	=		1,12,000 + 10,000 + 30,000
	=	Rs	1,52,000
Liabilities	=	Rs	30,000
Capital	=	Rs	1,22,000