Effect of Transactions on Ravi Traders using Accounting Equation:

The accounting equation is a fundamental principle in accounting that states that the assets of a business are equal to the liabilities plus the owner's equity. It can be expressed as:

Assets = Liabilities + Owner's Equity

Now, let's analyze the effect of each transaction on Ravi Traders using the accounting equation:

a) Started business with cash Rs 1,20,000:
This transaction increases both the cash (asset) and the owner's equity. The accounting equation will be affected as follows:
Assets (Cash) = Liabilities + Owner's Equity + Rs 1,20,000

b) Bought goods for cash Rs 20,000:
This transaction decreases the cash (asset) and increases the inventory (asset). The accounting equation will be affected as follows:
Assets (Cash - Rs 20,000, Inventory + Rs 20,000) = Liabilities + Owner's Equity + Rs 1,20,000

c) Rent received Rs 5,000:
This transaction increases the cash (asset) and does not affect liabilities or owner's equity. The accounting equation will be affected as follows:
Assets (Cash + Rs 5,000) = Liabilities + Owner's Equity + Rs 1,20,000

d) Salary outstanding Rs 2,000:
This transaction increases the liabilities (salary payable) and does not affect assets or owner's equity. The accounting equation will be affected as follows:
Assets = Liabilities (Salary Payable + Rs 2,000) + Owner's Equity + Rs 1,20,000

e) Goods destroyed by fire Rs 13,000:
This transaction decreases the inventory (asset) and does not affect liabilities or owner's equity. The accounting equation will be affected as follows:
Assets (Inventory - Rs 13,000) = Liabilities + Owner's Equity + Rs 1,20,000

f) Paid for charity Rs 200:
This transaction decreases the cash (asset) and does not affect liabilities or owner's equity. The accounting equation will be affected as follows:
Assets (Cash - Rs 200) = Liabilities + Owner's Equity + Rs 1,20,000

In summary, each transaction affects the accounting equation in different ways. By analyzing the effect of each transaction, we can track the changes in assets, liabilities, and owner's equity for Ravi Traders. It is important to maintain a balance between the two sides of the equation to ensure accurate financial records and reporting.

DATE. PARTICULARS. L.F. AMOUNT(DR).(CR)

1. Cash A/C. 1,2000
To capital A/C 1,2000
2. Purchase A/C. 20,000.
To cash A/C. 20,000
3. Cash A/C. 5,000.
To Rent A/C. 5,000
4. Salary A/C. 2,000
To O/S Salary A/C. 2,000
5. Loss by Fire A/C. 13,000.
To Purchase A/C. 13,000