What is the accounting treatment for purchase of stationery in accounting equation? Why?

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Solution

Dear Student

Purchase of Stationery is an Expense, It would result in decrease in profit, Also purchase in stationery would result in outflow of cash.
Therefore in accounting equation it would result in Decrease in Cash and Decrease in Capital\.

Regards

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From the following information, calculate the amount that will be shown against Stationery Account in Income and Expenditure Account for the year ended 31st March, 2018.

$\begin{matrix} Particulars & 01 - 04 - 2017 & 31 - 03 - 2018 Creditors for Stationery & 5, 000 & 12, 000 Stock of Stationery & 17, 000 & 32, 000 \end{matrix}$

During the year ended 31st March, 2018, payment made to creditors amounted to Rs 60,000. Stationery purchased during the year was Rs 1,00,000 (out of which 30 $%$ is cash purchases).

Rectify the following errors-

1) Purchase of stationery Rs 450 was debited to commission account.
2) Rs 7,000 received from Sunit has been wrongly posted to Sunil’s account.
3) Goods Rs 2,000 returned by Praveen were not recorded in the books.
4) Credit side of Sandeep account has been overcast by Rs 200.
5) Freight paid for purchase of furniture Rs 325 is debited to freight account.
6) Goods sold worth Rs 8,000 to Sadanand was posted to Vijayanand’s account

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What is the accounting treatment for purchase of stationery in accounting equation? Why?

Dear Student Purchase of Stationery is an Expense, It would result in decrease in profit, Also purchase in stationery would result in outflow of cash. Therefore in accounting equation it would result in Decrease in Cash and Decrease in Capital\. Regards

Dear Student

Purchase of Stationery is an Expense, It would result in decrease in profit, Also purchase in stationery would result in outflow of cash.
Therefore in accounting equation it would result in Decrease in Cash and Decrease in Capital\.

Regards