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Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash?
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Following transaction prepare accounting equation ? And balance sheet ...
**Accounting Equation and Balance Sheet for the Given Transactions**
The accounting equation is a fundamental principle in accounting that represents the relationship between a company's assets, liabilities, and equity. It can be expressed as:
Assets = Liabilities + Equity
The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents the company's assets, liabilities, and equity.
Let's analyze each of the given transactions and prepare the accounting equation and balance sheet accordingly.
**1. Starting business with cash Rs 40,000:**
- Transaction: The owner brings in Rs 40,000 in cash to start the business.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 40,000.
- Increase in equity by Rs 40,000.
- Updated Accounting Equation:
- Assets = Rs 40,000
- Liabilities = 0
- Equity = Rs 40,000
**2. Purchase goods costing Rs 3,000 in cash:**
- Transaction: The business purchases goods for Rs 3,000 in cash.
- Effect on Accounting Equation:
- Decrease in assets (cash) by Rs 3,000.
- Increase in assets (inventory) by Rs 3,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 40,000 - Rs 3,000 = Rs 37,000
- Liabilities = 0
- Equity = Rs 40,000
**3. Sold goods costing Rs 3,000 in cash:**
- Transaction: The business sells goods for Rs 3,000 in cash.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 3,000.
- Decrease in assets (inventory) by Rs 3,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 37,000 + Rs 3,000 = Rs 40,000
- Liabilities = 0
- Equity = Rs 40,000
**4. Bring Rs 24,000 additional amount in cash as capital:**
- Transaction: The owner brings in Rs 24,000 in cash as additional capital.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 24,000.
- Increase in equity by Rs 24,000.
- Updated Accounting Equation:
- Assets = Rs 40,000 + Rs 24,000 = Rs 64,000
- Liabilities = 0
- Equity = Rs 40,000 + Rs 24,000 = Rs 64,000
**5. Purchase furniture Rs 5,000 in cash:**
- Transaction: The business purchases furniture for Rs 5,000 in cash.
- Effect on Accounting Equation:
- Decrease in assets (cash) by Rs 5,000.
- Increase in assets (furniture) by Rs 5,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 64,000 - Rs 5,000 = Rs 59,000
- Liabilities = 0
- Equity = Rs 64
The accounting equation is a fundamental principle in accounting that represents the relationship between a company's assets, liabilities, and equity. It can be expressed as:
Assets = Liabilities + Equity
The balance sheet is a financial statement that provides a snapshot of a company's financial position at a specific point in time. It presents the company's assets, liabilities, and equity.
Let's analyze each of the given transactions and prepare the accounting equation and balance sheet accordingly.
**1. Starting business with cash Rs 40,000:**
- Transaction: The owner brings in Rs 40,000 in cash to start the business.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 40,000.
- Increase in equity by Rs 40,000.
- Updated Accounting Equation:
- Assets = Rs 40,000
- Liabilities = 0
- Equity = Rs 40,000
**2. Purchase goods costing Rs 3,000 in cash:**
- Transaction: The business purchases goods for Rs 3,000 in cash.
- Effect on Accounting Equation:
- Decrease in assets (cash) by Rs 3,000.
- Increase in assets (inventory) by Rs 3,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 40,000 - Rs 3,000 = Rs 37,000
- Liabilities = 0
- Equity = Rs 40,000
**3. Sold goods costing Rs 3,000 in cash:**
- Transaction: The business sells goods for Rs 3,000 in cash.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 3,000.
- Decrease in assets (inventory) by Rs 3,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 37,000 + Rs 3,000 = Rs 40,000
- Liabilities = 0
- Equity = Rs 40,000
**4. Bring Rs 24,000 additional amount in cash as capital:**
- Transaction: The owner brings in Rs 24,000 in cash as additional capital.
- Effect on Accounting Equation:
- Increase in assets (cash) by Rs 24,000.
- Increase in equity by Rs 24,000.
- Updated Accounting Equation:
- Assets = Rs 40,000 + Rs 24,000 = Rs 64,000
- Liabilities = 0
- Equity = Rs 40,000 + Rs 24,000 = Rs 64,000
**5. Purchase furniture Rs 5,000 in cash:**
- Transaction: The business purchases furniture for Rs 5,000 in cash.
- Effect on Accounting Equation:
- Decrease in assets (cash) by Rs 5,000.
- Increase in assets (furniture) by Rs 5,000.
- No effect on equity or liabilities.
- Updated Accounting Equation:
- Assets = Rs 64,000 - Rs 5,000 = Rs 59,000
- Liabilities = 0
- Equity = Rs 64
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Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash?
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Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash?.
Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Following transaction prepare accounting equation ? And balance sheet ? 1- starting business with cash rs 40000 2- purchase goods costing rs 3000 in cash 3- sold goods costing rs 3000 in cash 4-bring rs 24000 additional amount in cash as capital 5- purchase furniture rs 5000 in cash?.
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