Question

Show the accounting equation on the basis of the following transactions

1. Mr. Kumar commenced business with cash Rs 50,000.
2. Paid salary Rs 1,200.
3. Purchased furniture Rs 5,000.
4. Purchased goods from Rakesh for cash Rs 7,500.
5. Sold goods to Shyam costing Rs 13,000.
6. Paid Rent Rs 500.

Answer 1

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

+

Stock

+

Furniture

+

Shyam

=

+

(i)

Commenced business with cash Rs 50,000

50,000

–

–

–

–

50,000

(ii)

Paid salary Rs 1,200

(1,200)

–

–

–

=

–

(1,200)

48,800

=

48,800

(iii)

Purchased Furniture Rs 5,000

(5,000)

–

5,000

–

–

–

43,800

+

5,000

=

48,800

(iv)

Purchased goods from Rakesh for cash Rs 7,500

(7,500)

7,500

–

–

–

–

36,300

+

7,500

+

5,000

=

48,800

(v)

Sold goods to Shyam costing Rs 13,000

–

(13,000)

–

13,000

–

–

36,300

+

(5,500)

+

5,000

+

13,000

=

48,800

(vi)

Paid Rent Rs 500

(500)

–

–

–

=

–

(500)

35,800

+

(5,500)

+

5,000

+

13,000

=

–

48,300