Commerce Exam > Commerce Questions > Show the accounting equation Started business...
Start Learning for Free
Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500?
Most Upvoted Answer
Show the accounting equation Started business with cash:-50,000 Purcha...
Accounting Equation:
Transactions:
Explanation:
The accounting equation is a basic principle of accounting that shows the relationship between assets, liabilities, and equity. It is expressed as:
Assets = Liabilities + Equity
Transactions:
- Started business with cash: -50,000
- Purchased goods from Ram on credit: -10,000
- Cash sales: -2,000
- Credit sales to Hari: -1,500
Explanation:
When the business started, it had cash of 50,000, which is an asset. Therefore, the accounting equation can be expressed as:
Assets = 50,000
When the business purchased goods from Ram on credit, it acquired goods with a value of 10,000, which is an asset, but it also incurred a liability to Ram for the same amount. Therefore, the accounting equation can be expressed as:
Assets = 60,000
Liabilities = 10,000
When the business made cash sales of 2,000, it received cash, which is an asset. Therefore, the accounting equation can be expressed as:
Assets = 62,000
Liabilities = 10,000
When the business made credit sales to Hari, it earned revenue of 1,500, which increases equity, but it also incurred a liability to Hari for the same amount. Therefore, the accounting equation can be expressed as:
Assets = 62,000
Liabilities = 11,500
Equity = 1,500
Thus, the accounting equation is always balanced, and any change in one element affects the other elements. In this example, the assets increased by 12,000, and the liabilities increased by 1,500, resulting in an increase in equity by 1,500.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500?
Question Description
Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500?.
Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500?.
Solutions for Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? defined & explained in the simplest way possible. Besides giving the explanation of
Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500?, a detailed solution for Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? has been provided alongside types of Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? theory, EduRev gives you an
ample number of questions to practice Show the accounting equation Started business with cash:-50,000 Purchased goods from Ram on credit:-10,000 Cash sales:-2,000 Credit sales to hari:-1,500? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup