Commerce Exam > Commerce Questions > Kunal started business with cash 250000 she p...
Start Learning for Free
Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000
?
Most Upvoted Answer
Kunal started business with cash 250000 she purchased future for cash ...
Explanation of Accounting Equation
The accounting equation is an essential concept in financial accounting. It is the foundation upon which all accounting transactions are based. It states that assets must always be equal to the sum of liabilities and equity. The equation is expressed as follows:
Assets = Liabilities + Equity
Application of Accounting Equation to Kunal's Business Transactions
Kunal started her business with cash 250000. This transaction will increase the assets of the business by the same amount.
Assets: 250000
She purchased future for cash 35000. This transaction will decrease the cash balance and increase the assets in the form of the future.
Assets: 285000
Liabilities: 35000
Kunal paid commission 2003. This transaction will decrease the cash balance.
Assets: 282997
She purchased goods on credit 40000. This transaction will increase the assets in the form of inventory and also increase the liabilities in the form of accounts payable.
Assets: 322997
Liabilities: 40000
Kunal sold goods costing rupees 20000 for cash 26000. This transaction will increase the cash balance, decrease the inventory (cost of goods sold), and increase the revenue.
Assets: 298997
Revenue: 6000
Conclusion
In conclusion, the accounting equation can be used to analyze Kunal's business transactions. The equation ensures that the balance sheet always remains in balance. By applying the equation, we can see that Kunal's assets have increased from 250000 to 298997, liabilities have increased from 0 to 40000, and equity (capital) has remained unchanged.
The accounting equation is an essential concept in financial accounting. It is the foundation upon which all accounting transactions are based. It states that assets must always be equal to the sum of liabilities and equity. The equation is expressed as follows:
Assets = Liabilities + Equity
Application of Accounting Equation to Kunal's Business Transactions
Kunal started her business with cash 250000. This transaction will increase the assets of the business by the same amount.
She purchased future for cash 35000. This transaction will decrease the cash balance and increase the assets in the form of the future.
Kunal paid commission 2003. This transaction will decrease the cash balance.
She purchased goods on credit 40000. This transaction will increase the assets in the form of inventory and also increase the liabilities in the form of accounts payable.
Kunal sold goods costing rupees 20000 for cash 26000. This transaction will increase the cash balance, decrease the inventory (cost of goods sold), and increase the revenue.
Conclusion
In conclusion, the accounting equation can be used to analyze Kunal's business transactions. The equation ensures that the balance sheet always remains in balance. By applying the equation, we can see that Kunal's assets have increased from 250000 to 298997, liabilities have increased from 0 to 40000, and equity (capital) has remained unchanged.
Community Answer
Kunal started business with cash 250000 she purchased future for cash ...
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2?
Question Description
Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2?.
Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2?.
Solutions for Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? defined & explained in the simplest way possible. Besides giving the explanation of
Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2?, a detailed solution for Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? has been provided alongside types of Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? theory, EduRev gives you an
ample number of questions to practice Kunal started business with cash 250000 she purchased future for cash 35000 he paid Commission 2003 purchased goods on credit 40000 he sold goods costing rupees 20000 4 cash 26000 Related: XI - 5 - Accounting Equation: 2018-19: Ex-2? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup