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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
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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.
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Kunal started business with cash 250000 she purchased future for cash ...
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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?
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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?.
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