Commerce Exam > Commerce Questions > Goods costing 20000 sold for 18500 for cash. ...
Start Learning for Free
Goods costing 20000 sold for 18500 for cash. What is the accounting equation?
Most Upvoted Answer
Goods costing 20000 sold for 18500 for cash. What is the accounting eq...
Accounting Equation
The accounting equation is an essential concept in accounting that represents the relationship between assets, liabilities, and owner's equity. It is expressed as:
Assets = Liabilities + Owner's Equity
Example Calculation
In this example, goods costing 20000 were sold for 18500 in cash. Let's break down the accounting equation:
- Assets: The assets decrease by the amount of cash received from the sale, which is 18500.
- Liabilities: There are no liabilities involved in this transaction.
- Owner's Equity: The owner's equity decreases by the amount of the loss incurred, which is calculated as the difference between the cost of goods sold (20000) and the amount received from the sale (18500), which is 1500.
Conclusion
The accounting equation is the foundation of accounting and is used to ensure that the financial statements are accurate and balanced. In this example, we can see how the accounting equation is affected by a sale of goods for less than their cost, resulting in a decrease in assets and owner's equity.
Community Answer
Goods costing 20000 sold for 18500 for cash. What is the accounting eq...
Cash increase by 18500stock decrease by 20000 capital decrease by 1500 because there is a loss
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
Goods costing 20000 sold for 18500 for cash. What is the accounting equation?
Question Description
Goods costing 20000 sold for 18500 for cash. What is the accounting equation? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods costing 20000 sold for 18500 for cash. What is the accounting equation? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods costing 20000 sold for 18500 for cash. What is the accounting equation?.
Goods costing 20000 sold for 18500 for cash. What is the accounting equation? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goods costing 20000 sold for 18500 for cash. What is the accounting equation? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goods costing 20000 sold for 18500 for cash. What is the accounting equation?.
Solutions for Goods costing 20000 sold for 18500 for cash. What is the accounting equation? 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 Goods costing 20000 sold for 18500 for cash. What is the accounting equation? defined & explained in the simplest way possible. Besides giving the explanation of
Goods costing 20000 sold for 18500 for cash. What is the accounting equation?, a detailed solution for Goods costing 20000 sold for 18500 for cash. What is the accounting equation? has been provided alongside types of Goods costing 20000 sold for 18500 for cash. What is the accounting equation? theory, EduRev gives you an
ample number of questions to practice Goods costing 20000 sold for 18500 for cash. What is the accounting equation? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
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