# Question No 1 Chapter No 5 – T.S. Grewal 11 Class

Question No 1 Chapter No 5

1. What will be effect of the following on the Accounting Equation?
1. Started Business with cash 45,000
2. Opened a bank account with a deposit of   4,500
3. Bought goods from M/s Sun & Co. for 11,200

### Solution of Question No 1 Chapter No 5: –

 S. No. Particulars Assets Liabilities Capital Cash +Bank +Stock +Creditors 1 Started Business with cash 45,000 45000 – – – +45000 45000 – – – +45000 2 Opened a bank account with a deposit of  4,500 -4500 +4500 – – – 40500 +4500 – – +45000 3 Bought goods from M/s Sun & Co. for 11,200 – – +11200 +11,200 – Total 40500 +4500 +11200 +11,200 +45000

Assets:  Cash 40,500 + Bank 4,500 + Stock 11,200 = 56,200/-

Liabilities : Creditors 11,200 , Capital 45,000.

Liabilities  +Capital

11,200 + 45,000 = 56,200/-

### Explanation of All Transactions with images: –

This is not a part of the solution, So you don’t have to write it in the exam. So why we explained if it is not needed. Because This explanation will help you to understand all transactions with logic so don’t need to remember all the transactions but just understand and remember the logic use behind it.

#### Transaction No. 1

Transaction No. 1 Question No.1 – Chapter No.5- T.S. Grewal +1 Book 2019

As we discuss in the previous topic, A owner and the business both have a separate identity in the eye of law. So, the business will be treated as an Artificial Person and anything invested by the owner into the business will be treated as capital.
So, In this transaction, as shown in the above image owner investing her cash into the business, this will be treated as capital of the business. The business receiving an i.e. cash.

#### Transaction No. 2

In this transaction, as shown in the above image Business depositing its cash in the bank account, So, a new is created i.e. Bank and subtracted an amount from cash because cash going from the Business.

#### Transaction No. 3

In this transaction, as shown in the above image business brought goods from M/s Sun & co. So,the business received goods, a new is created i.e. Stock, but it is not clear about payment so, it will be treated as a credit transaction and M/s Sun & co. will be treated as our creditor(Liabilities) because the business will pay the due amount of it in near future.