**Accounting Equation:**

The accounting equation, also known as the balance sheet equation, is a fundamental principle in accounting. It states that:

Assets = Liabilities + Owner's Equity

Assets represent the resources owned by a business, including cash, inventory, equipment, and property. Liabilities are the debts and obligations owed by the business, such as loans and accounts payable. Owner's equity represents the owner's investment in the business and the accumulated profits or losses.

**Given Transactions:**

i) Started business with cash Rs 35,000.
ii) Credit purchases of goods Rs 9,000.
iii) Payment made in full settlement Rs 9,000.
iv) Purchase of machinery for cash Rs 10,000.
v) Sold goods costing Rs.2,000 for Rs.2,500 out of which Rs. 2,000 received in cash.
vi) Commission received in advance Rs. 1,000.

**Analysis of Transactions:**

i) Started business with cash Rs 35,000.
- This transaction increases both the cash (asset) and the owner's equity (capital).

ii) Credit purchases of goods Rs 9,000.
- This transaction increases the inventory (asset) and creates an accounts payable (liability).

iii) Payment made in full settlement Rs 9,000.
- This transaction decreases both the accounts payable (liability) and the cash (asset).

iv) Purchase of machinery for cash Rs 10,000.
- This transaction decreases the cash (asset) and increases the machinery (asset).

v) Sold goods costing Rs.2,000 for Rs.2,500 out of which Rs. 2,000 received in cash.
- This transaction increases the cash (asset) and the sales (revenue). It also decreases the inventory (asset) and the cost of goods sold (expense).

vi) Commission received in advance Rs. 1,000.
- This transaction increases the cash (asset) and creates a liability called unearned revenue (liability).

**Accounting Equation after Transactions:**

Based on the given transactions, the accounting equation can be prepared as follows:

**Assets:**
Cash = Rs 35,000 + Rs 2,000 - Rs 10,000 + Rs 1,000 = Rs 28,000
Inventory = Rs 9,000 - Rs 2,000 = Rs 7,000
Machinery = Rs 10,000

**Liabilities:**
Accounts Payable = Rs 0 (settled in full)
Unearned Revenue = Rs 1,000

**Owner's Equity:**
Capital = Rs 35,000 + Rs 2,500 - Rs 2,000 = Rs 35,500

**Accounting Equation:**
Assets (Rs 28,000 + Rs 7,000 + Rs 10,000) = Liabilities (Rs 0 + Rs 1,000) + Owner's Equity (Rs 35,500)

Therefore, the accounting equation is balanced.