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Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000?
Most Upvoted Answer
Show the accounting equation on the basis of following transaction and...
Accounting Equation:
The accounting equation is Assets = Liabilities + Equity. It represents the fundamental relationship between a company's assets, its creditors, and its owners.
Balance Sheet:
A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. It provides investors and analysts with a snapshot of a company's financial position.
On the basis of the given transactions, the accounting equation can be shown as:
Assets = Liabilities + Equity
30000 + 10000 + 5000 + 15500 - 1500 - 8000 = 0 + Equity
25500 = Equity
Therefore, the balance sheet can be prepared as follows:
Balance Sheet
Assets
Cash: 30000
Inventory: 15500
Furniture: 5000
Total Assets: 50500
Liabilities
None
Equity
Owner's Equity: 25500
Total Liabilities and Equity: 50500
Explanation:
1. Ram started his business with cash of 30000, which increased the assets of the business.
2. He purchased goods for cash of 10000, which increased the inventory asset.
3. He brought furniture for cash of 5000, which increased the furniture asset.
4. He bought goods on credit for 15500, which increased the inventory asset and the liabilities of the business.
5. He paid rent of 1500, which decreased the cash asset.
6. He sold goods costing 8000 for cash of 11000, which increased the cash asset and reduced the inventory asset.
As a result of these transactions, the assets of the business increased by 50500, and the liabilities remained at 0. The owner's equity increased by 25500, which is equal to the total assets minus the total liabilities. The balance sheet reflects the financial position of the business at the end of these transactions.
The accounting equation is Assets = Liabilities + Equity. It represents the fundamental relationship between a company's assets, its creditors, and its owners.
Balance Sheet:
A balance sheet is a financial statement that reports a company's assets, liabilities, and equity at a specific point in time. It provides investors and analysts with a snapshot of a company's financial position.
On the basis of the given transactions, the accounting equation can be shown as:
Assets = Liabilities + Equity
30000 + 10000 + 5000 + 15500 - 1500 - 8000 = 0 + Equity
25500 = Equity
Therefore, the balance sheet can be prepared as follows:
Balance Sheet
Assets
Cash: 30000
Inventory: 15500
Furniture: 5000
Total Assets: 50500
Liabilities
None
Equity
Owner's Equity: 25500
Total Liabilities and Equity: 50500
Explanation:
1. Ram started his business with cash of 30000, which increased the assets of the business.
2. He purchased goods for cash of 10000, which increased the inventory asset.
3. He brought furniture for cash of 5000, which increased the furniture asset.
4. He bought goods on credit for 15500, which increased the inventory asset and the liabilities of the business.
5. He paid rent of 1500, which decreased the cash asset.
6. He sold goods costing 8000 for cash of 11000, which increased the cash asset and reduced the inventory asset.
As a result of these transactions, the assets of the business increased by 50500, and the liabilities remained at 0. The owner's equity increased by 25500, which is equal to the total assets minus the total liabilities. The balance sheet reflects the financial position of the business at the end of these transactions.
Community Answer
Show the accounting equation on the basis of following transaction and...
Cash-24500 + stock - 17500 + furniture- 5000 = creditors - 15500 + capital - 31500
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Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000?
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Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000? 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 Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000?.
Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000? 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 Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Show the accounting equation on the basis of following transaction and prepare a balance sheet on the basis of last equation 1 Ram started business with cash 30000 2 purchase good for cash 10,000 3 brought furniture for cash 5000 4 broad goods on credit 15500 5 paid rent 1500 6 sold good costing 8000 for cash 11000?.
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