Question

Prepare an Accounting Equation from the following:
(i) Started business with cash ₹ 50,000 and goods ₹ 30,000.
(ii) Purchased goods for cash ₹ 30,000 and on credit from Karan ₹ 20,000.
(iii) Goods costing ₹ 40,000 were sold for ₹ 55,000.
(iv) Withdrew cash for personal use ₹ 10,000.
(v) Rent outstanding ₹ 2,000.

Answer 1

S. No.	Transactions	Assets			=	Liabilities			+	Capital
		Cash (Rs)	+	Stock (Rs)		Creditors (Rs)	+	Outstanding Rent (Rs)		(Rs)
(i)	Started business with cash Rs 50,000 and goods Rs 30,000	50,000	+	30,000						80,000
		50,000	+	30,000	=					80,000
(ii)	Purchased goods for cash Rs 30,000 and on credit from Karan Rs 20,000	– 30,000		30,000
				20,000		20,000
		20,000	+	80,000	=	20,000			+	80,000
(iii)	Goods costing Rs 40,000 were sold for Rs 55,000	55,000		- 40,000						15,000 (Profit)
		75,000	+	40,000	=	20,000			+	95,000
(iv)	Withdrew cash for personal use Rs 10,000	– 10,000								– 10,000 (Drawings)
		65,000	+	40,000	=	20,000			+	85,000
(v)	Rent outstanding Rs 2,000							2,000		– 2,000 (Expenses)
		65,000	+	40,000	=	20,000	+	2,000	+	83,000