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Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200?
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Prepare accounting equation 1. Ajeet start business with cash 20000 2....
Accounting Equation for Ajeet's Business:
Assets = Liabilities + Owner's Equity
1. Starting the Business:
- Ajeet's initial investment of cash $20,000 increases the assets of the business.
- Therefore, the accounting equation now looks like this:
Assets ($20,000) = Liabilities ($0) + Owner's Equity ($20,000)
2. Purchase of Furniture:
- The purchase of furniture for $2,000 reduces the cash assets and increases the furniture assets.
- The accounting equation now becomes:
Assets ($18,000 cash + $2,000 furniture) = Liabilities ($0) + Owner's Equity ($20,000)
3. Payment of Rent:
- Paying rent for $200 reduces the cash assets.
- The accounting equation now looks like this:
Assets ($17,800 cash + $2,000 furniture) = Liabilities ($0) + Owner's Equity ($20,000)
In summary, Ajeet's business now has assets of $19,800 ($17,800 cash + $2,000 furniture), no liabilities, and owner's equity of $20,000. This shows that the accounting equation remains balanced throughout the transactions.
Assets = Liabilities + Owner's Equity
1. Starting the Business:
- Ajeet's initial investment of cash $20,000 increases the assets of the business.
- Therefore, the accounting equation now looks like this:
Assets ($20,000) = Liabilities ($0) + Owner's Equity ($20,000)
2. Purchase of Furniture:
- The purchase of furniture for $2,000 reduces the cash assets and increases the furniture assets.
- The accounting equation now becomes:
Assets ($18,000 cash + $2,000 furniture) = Liabilities ($0) + Owner's Equity ($20,000)
3. Payment of Rent:
- Paying rent for $200 reduces the cash assets.
- The accounting equation now looks like this:
Assets ($17,800 cash + $2,000 furniture) = Liabilities ($0) + Owner's Equity ($20,000)
In summary, Ajeet's business now has assets of $19,800 ($17,800 cash + $2,000 furniture), no liabilities, and owner's equity of $20,000. This shows that the accounting equation remains balanced throughout the transactions.
Community Answer
Prepare accounting equation 1. Ajeet start business with cash 20000 2....
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Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200?
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Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200?.
Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Prepare accounting equation 1. Ajeet start business with cash 20000 2. Purchase furniture for 2000 3. Paid rent for 200?.
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