Accounting Equation Solutions

The accounting equation is a fundamental principle in accounting that states that assets are equal to liabilities plus owner's equity. This equation represents the basis of the double-entry accounting system, which is used by businesses to record financial transactions.

In this scenario, the business has commenced with cash, stock, and furniture. Let's break down the accounting equation and see how it applies to this situation:

Assets = Liabilities + Owner's Equity

Assets:
- Cash: Rupees 20,000
- Stock: Rupees 50,000
- Furniture: Rupees 30,000

Total Assets: Rupees 100,000

Liabilities:
The problem does not mention any liabilities, so we assume there are none.

Owner's Equity:
- Initial Investment: Rupees 100,000 (Cash + Stock + Furniture)

Total Owner's Equity: Rupees 100,000

Therefore, the accounting equation is balanced:
Assets (Rupees 100,000) = Liabilities (0) + Owner's Equity (Rupees 100,000)

This means that the business has a strong financial position with a total asset of Rupees 100,000, which is equal to the owner's equity.

Summary
- Assets are equal to liabilities plus owner's equity.
- The business has commenced with cash, stock, and furniture.
- The total assets are Rupees 100,000.
- There are no liabilities assumed.
- The owner's equity is Rupees 100,000, which is equal to the total assets.
- The accounting equation is balanced.

Cash+stock+furniture=liabilities+ capital
20,000+50,000+30,000=0+ 20,000