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Accounting Equation

The document contains practice questions aimed at demonstrating the accounting equation through various transactions. It includes scenarios for different individuals and companies, detailing their capital, purchases, sales, and liabilities. The objective is to calculate capital and profits based on the provided transactions.

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keaganfernandes171
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54 views1 page

Accounting Equation

The document contains practice questions aimed at demonstrating the accounting equation through various transactions. It includes scenarios for different individuals and companies, detailing their capital, purchases, sales, and liabilities. The objective is to calculate capital and profits based on the provided transactions.

Uploaded by

keaganfernandes171
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

ACCOUNTING EQUATION

PRACTICE QUESTIONS

1. With the help of the following transactions prove the accounting equation.
a. Yash stated business with Cash Rs.1,00,000 & goods Rs. 40,000, Machinery
Rs.60,000.
b. Purchased Furniture for cash Rs.20,000.
c. Sold goods worth Rs.8,000 for Rs.12,000.
d. Outstanding salary Rs.1000.
e. Interest on capital Rs.200.
f. Depreciate machinery @10% for 6 months.
g. Paid rent Rs.4000 including Rs.1000 as advance.
h. Bought goods for cash Rs.30000 and on credit Rs.20000.
i. Sold goods bought on credit for Rs.25000.
j. Purchased furniture worth Rs.10000 for office use and Rs.5000 for domestic use.

2. Prepare accounting equation from the following transactions of ABC Co. Ltd.
1. Started business with cash Rs. 75,000 and goods Rs. 50,000.
2. Bought machinery for Rs. 60,000. Half amount was paid in cash.
3. Sold goods of Rs. 12,000 for Rs. 15,000 @ 10% cash discount
4. Paid creditor Rs. 30,000
3. Vinod has the following transactions. Show accounting equation for the same:
a. Started business with cash Rs.30,000; Stock Rs.12,000; Machinery Rs.20,000; Furniture
Rs.10,000.
b. 1/3rd of the above goods sold at a profit of 10% on cost and half of the payment is
received in cash.
c. Cash withdrawn for personal use Rs.2,000.
d. Interest on drawings charged @ 5%.

Mr. Athul started business with capital of Rs.1,80,000 on 1st April 2014. He borrowed Rs.25,000
from his friend. On 31st march 2015 the firm had assets of Rs.3,20,000 and liabilities of
Rs.25,000. Calculate the capital at the end of year and profit made by the firm.

X started a business on 1st April, 2012 with a capital of Rs.50000 and a loan of Rs.25,000
borrowed from Y. During 2012-13, he had introduced additional capital of Rs.25,000 and had
withdrawn Rs.15,000 for personal use. On 31st March, 2013 his assets were Rs.1,50,000. Find
out his capital as on 31st March, 2013 and profit made or loss incurred during the year 2012-13.
____________

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