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Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000?
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Prepare accounting equation on the basis of the following a) Harsha st...
**Accounting Equation**
The accounting equation is a fundamental principle in accounting that states that the assets of a business are equal to the liabilities plus the owner's equity. It can be represented as:
Assets = Liabilities + Owner's Equity
**Analysis of Transactions:**
a) Harsha started the business with cash rupees 200,000
- This transaction increases the cash balance, which is an asset.
**Accounting Equation:**
Assets (+) Cash = 200,000
b) Harsha purchased goods from Neman for cash rupees 40,000
- This transaction involves the purchase of goods, which increases the inventory (asset) and decreases the cash balance (asset).
**Accounting Equation:**
Assets (+) Cash = 200,000 - 40,000 = 160,000
Assets (+) Inventory = 40,000
c) Harsha sold goods to Bhanu (costing rupees 10,000) for rupees 12,000
- This transaction involves the sale of goods, which decreases the inventory (asset) and increases the account receivable (asset) and revenue (owner's equity).
**Accounting Equation:**
Assets (-) Inventory = 40,000 - 10,000 = 30,000
Assets (+) Account Receivable = 12,000
Owner's Equity (+) Revenue = 12,000
d) Harsha bought furniture from S.R furniture on credit rupees 7,000
- This transaction involves the purchase of furniture, which increases the furniture (asset) and increases the accounts payable (liability).
**Accounting Equation:**
Assets (+) Furniture = 7,000
Liabilities (+) Accounts Payable = 7,000
**Updated Accounting Equation:**
Assets (+) Cash = 160,000
Assets (+) Inventory = 30,000
Assets (+) Account Receivable = 12,000
Assets (+) Furniture = 7,000
Liabilities (+) Accounts Payable = 7,000
Owner's Equity (+) Revenue = 12,000
**Summary:**
The accounting equation is a fundamental principle in accounting that represents the relationship between assets, liabilities, and owner's equity. By analyzing the given transactions, we can see how each transaction affects the accounting equation. Harsha's business started with cash of 200,000, made a purchase of goods for 40,000, sold goods for 12,000, and bought furniture on credit for 7,000. These transactions result in changes in the asset, liability, and owner's equity accounts of the business.
The accounting equation is a fundamental principle in accounting that states that the assets of a business are equal to the liabilities plus the owner's equity. It can be represented as:
Assets = Liabilities + Owner's Equity
**Analysis of Transactions:**
a) Harsha started the business with cash rupees 200,000
- This transaction increases the cash balance, which is an asset.
**Accounting Equation:**
Assets (+) Cash = 200,000
b) Harsha purchased goods from Neman for cash rupees 40,000
- This transaction involves the purchase of goods, which increases the inventory (asset) and decreases the cash balance (asset).
**Accounting Equation:**
Assets (+) Cash = 200,000 - 40,000 = 160,000
Assets (+) Inventory = 40,000
c) Harsha sold goods to Bhanu (costing rupees 10,000) for rupees 12,000
- This transaction involves the sale of goods, which decreases the inventory (asset) and increases the account receivable (asset) and revenue (owner's equity).
**Accounting Equation:**
Assets (-) Inventory = 40,000 - 10,000 = 30,000
Assets (+) Account Receivable = 12,000
Owner's Equity (+) Revenue = 12,000
d) Harsha bought furniture from S.R furniture on credit rupees 7,000
- This transaction involves the purchase of furniture, which increases the furniture (asset) and increases the accounts payable (liability).
**Accounting Equation:**
Assets (+) Furniture = 7,000
Liabilities (+) Accounts Payable = 7,000
**Updated Accounting Equation:**
Assets (+) Cash = 160,000
Assets (+) Inventory = 30,000
Assets (+) Account Receivable = 12,000
Assets (+) Furniture = 7,000
Liabilities (+) Accounts Payable = 7,000
Owner's Equity (+) Revenue = 12,000
**Summary:**
The accounting equation is a fundamental principle in accounting that represents the relationship between assets, liabilities, and owner's equity. By analyzing the given transactions, we can see how each transaction affects the accounting equation. Harsha's business started with cash of 200,000, made a purchase of goods for 40,000, sold goods for 12,000, and bought furniture on credit for 7,000. These transactions result in changes in the asset, liability, and owner's equity accounts of the business.
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Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000?
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Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000? 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 Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000?.
Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000? 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 Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Prepare accounting equation on the basis of the following a) Harsha started business with cash rupees 200000 b) purchase goods from neman for cash rupees 40000 C) sold goods to Bhanu ( costing rupees 10000 ) for rupees 12000 d) bought furniture from S.R furniture on credit rupees 7000?.
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