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As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000?
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As a result of the following transaction, the total of accounting equa...
As a result of the transactions you described, the accounting equation would be:
Assets = Liabilities + Equity
Cash + Furniture + Goods (on credit) = Liabilities + Equity
200,000 + 25,000 + 60,000 = Liabilities + Equity
The total of the accounting equation would be:
285,000 = Liabilities + Equity
In this case, the total assets of the business are 285,000, and this amount is financed by a combination of liabilities (e.g., debts or loans) and equity (e.g., owner's capital). The specific amounts of liabilities and equity will depend on the details of the transactions and the financial structure of the business.
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As a result of the following transaction, the total of accounting equa...
The Accounting Equation:
The accounting equation is a fundamental principle in accounting that states that assets equal liabilities plus owner's equity. It is the foundation of double-entry bookkeeping and helps ensure that the financial statements are accurate and balanced.
Transaction Details:
In this scenario, there are three transactions:
i) Started business with cash Rs. 2,00,000
ii) Purchased furniture Rs. 25,000
iii) Purchased goods on credit Rs. 60,000
Effect on the Accounting Equation:
1. Started business with cash Rs. 2,00,000:
- This transaction increases the assets of the business as cash is a current asset.
- The cash amount of Rs. 2,00,000 will be debited to the cash account.
- The accounting equation is now:
Assets = Liabilities + Owner's Equity
Rs. 2,00,000 = 0 + Owner's Equity
2. Purchased furniture Rs. 25,000:
- This transaction increases the assets of the business as furniture is a fixed asset.
- The furniture amount of Rs. 25,000 will be debited to the furniture account.
- The accounting equation is now:
Rs. 2,00,000 + Rs. 25,000 = 0 + Owner's Equity
3. Purchased goods on credit Rs. 60,000:
- This transaction increases the assets of the business as goods are inventory/stock.
- The inventory amount of Rs. 60,000 will be debited to the inventory account.
- The accounting equation is now:
Rs. 2,00,000 + Rs. 25,000 + Rs. 60,000 = 0 + Owner's Equity
Overall Effect:
- The total assets will be the sum of all individual assets.
- The total liabilities and owner's equity will be zero as there is no mention of liabilities or owner's investment in the transaction.
- Hence, the total of the accounting equation will be:
Rs. 2,00,000 + Rs. 25,000 + Rs. 60,000 = 0 + Owner's Equity
Conclusion:
In conclusion, the accounting equation will be balanced with the total assets amounting to Rs. 2,85,000 (Rs. 2,00,000 cash + Rs. 25,000 furniture + Rs. 60,000 inventory) and the total liabilities and owner's equity being zero. This equation helps maintain the balance and accuracy of the financial statements and provides a clear picture of the business's financial position.
The accounting equation is a fundamental principle in accounting that states that assets equal liabilities plus owner's equity. It is the foundation of double-entry bookkeeping and helps ensure that the financial statements are accurate and balanced.
Transaction Details:
In this scenario, there are three transactions:
i) Started business with cash Rs. 2,00,000
ii) Purchased furniture Rs. 25,000
iii) Purchased goods on credit Rs. 60,000
Effect on the Accounting Equation:
1. Started business with cash Rs. 2,00,000:
- This transaction increases the assets of the business as cash is a current asset.
- The cash amount of Rs. 2,00,000 will be debited to the cash account.
- The accounting equation is now:
Assets = Liabilities + Owner's Equity
Rs. 2,00,000 = 0 + Owner's Equity
2. Purchased furniture Rs. 25,000:
- This transaction increases the assets of the business as furniture is a fixed asset.
- The furniture amount of Rs. 25,000 will be debited to the furniture account.
- The accounting equation is now:
Rs. 2,00,000 + Rs. 25,000 = 0 + Owner's Equity
3. Purchased goods on credit Rs. 60,000:
- This transaction increases the assets of the business as goods are inventory/stock.
- The inventory amount of Rs. 60,000 will be debited to the inventory account.
- The accounting equation is now:
Rs. 2,00,000 + Rs. 25,000 + Rs. 60,000 = 0 + Owner's Equity
Overall Effect:
- The total assets will be the sum of all individual assets.
- The total liabilities and owner's equity will be zero as there is no mention of liabilities or owner's investment in the transaction.
- Hence, the total of the accounting equation will be:
Rs. 2,00,000 + Rs. 25,000 + Rs. 60,000 = 0 + Owner's Equity
Conclusion:
In conclusion, the accounting equation will be balanced with the total assets amounting to Rs. 2,85,000 (Rs. 2,00,000 cash + Rs. 25,000 furniture + Rs. 60,000 inventory) and the total liabilities and owner's equity being zero. This equation helps maintain the balance and accuracy of the financial statements and provides a clear picture of the business's financial position.
Community Answer
As a result of the following transaction, the total of accounting equa...
2,85,000
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As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000?.
As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for As a result of the following transaction, the total of accounting equation will be i) Started business with cash Rs. 2,00,000 ii) Purchased furniture Rs. 25,000 iii) Purchased goods on credit Rs. 60,000?.
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