Question No 8 Chapter No 4
8. Show the accounting equation on the basis of the following transaction:
| (i) | Archna started business with cash Rs 50,000, stock Rs 25,000 and furniture Rs 15,000 |
| (ii) | Goods coating Rs 13,000 sold for 16,000 on credit |
| (iii) | Purchased goods on credit Rs 35,000 |
| (iv) | Depreciate furniture by Rs 2,000 |
| (v) | Bad debts are written off Rs 4,500 |
| (vi) | Cash received Rs 6,400 from customer and allowed him to discount Rs 100 |
| (vii) | Bad debts recovered Rs 2,500 |
| (viii) | Cash paid to creditor Rs 14,600 and discount received Rs 400 |
The solution of Question No 8 Chapter No 4: –
| S. No. | Particulars | Assets | Liabilities | Capital | ||
| Cash | +Stock | + furniture +Debtors |
Creditor | |||
| 1 | Commenced business with cash, Stock and furniture | 50,000 | +25,000 | +15,000 | – | 90,000 |
| 50,000 | +25,000 | +15,000 | – | 90,000 | ||
| 2 | Goods sold no credit at profit | – 13,000 | + 16,000 | +3,000 | ||
| 50,000 | 12,000 | +15,000 +16,000 |
– | 93,000 | ||
| 3 | Purchased goods on credit | – | +35,000 | + 35,000 | ||
| 50,000 | +47,000 | +15,000 +16,000 |
+ 35,000 | 93,000 | ||
| 4 | Depreciate furniture | – | -2,000 | -2,000 | ||
| 50,000 | +47,000 | + 13,000 +16,000 |
35,000 | 91,000 | ||
| 5 | Bad debts written off | – | – 4,500 | – 4,500 | ||
| 50,000 | +47,000 | + 13,000 +11,500 |
35,000 | 86,500 | ||
| 6 | Cash received from customer and discount allowed | +6,400 | +2,800 | -6,500 | -100 | |
| 56,400 | +47,000 | + 13,000 +5,000 |
35,000 | 86,100 | ||
| 7 | Bad debts recovered | +2,500 | – | +2,500 | ||
| 58,900 | +47,000 | + 13,000 +5,000 |
35,000 | 88,900 | ||
| 8 | Cash paid to creditors and discount received | -14,600 | -15,000 | +,400 | ||
| Total | 44,300 | +47,000 |
+13,000 +5,000 |
20,000 |
89,300 | |
Answer: –
Assets = 44,300 + 47,000 + 13,000 + 5,500 = 1,09,300/-
Capital = 89,300/-
Liabilities = 20,000/-
Liabilities +Capital
20,000+ 89,300= 1,01,900/-
What is Accounting Equation | Example
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Also, Check out the solved question of all Chapters: –
Chapter No. 2 – Theory Base of Accounting
Chapter No. 3 – Vouchers and transactions
Chapter No. 4 – Journal
Chapter No. 5 – Ledger
Chapter No. 6 – Cash Book
Chapter No. 7 – Other Subsidiary Books
Chapter No. 8 – Journal Proper
Chapter No. 9 – Trial Balance
Chapter No. 10 – Bank Reconciliation Statement
Chapter No. 11 – Depreciation
Chapter No. 12 – Provisions and Reserves
Chapter No. 13 – Bills of Exchange
Chapter No. 14 – Rectification of Errors
Chapter No. 15 – Financial Statements – (Without Adjustments)
Chapter No. 16 – Financial Statements – (With Adjustments)