payment made to creditors in full settlement accounting equation

Received ₹ 800 for Commission. ₹ ₹ (iv) Withdrew cash for personal use 10,000. WN1 Calculation of Sale Price. (ii) Credit purchase of goods 18,000. Accounting Equation Formula: Assets= Liabilities- Owner’s Equity. The formula can be modified to exclude cash payments to suppliers, since the numerator should include only purchases on credit from suppliers. (a)Ramesh commenced business on 1st Jan. 2015 with a Capital of Rs. 13. 24: Received Rs. Prepare accounting equation from the following: 17,500 (iv) Purchases of machinery for cash Rs. 8. Mohit has the following transactions, prepare the accounting equation: Business started with cash ₹ 1,75,000; Purchased goods from Rohit ₹ 50,000; Sold goods on credit to Manish (Costing ₹ 17,500)₹ 20,000; Purchased furniture for office use ₹ 10,000; Cash paid to Rohit in full settlement ₹ 48,500; Cash received from … 1. On 31st March, 2014, his assets were ₹ 1,75,000. (v) Sold goods on credit ₹ 50,000 (costing ₹ 38,000). (v) Paid salary ₹ 500 and salary outstanding being ₹ 100. 30 Paid rent and salaries for the month Rs. LO1 4. 2. Yogesh commenced business on 1st April, 2011 with a Capital of ₹ 5,00,000 and a loan of ₹ 1,00,000 borrowed from Citi Bank. (v) Paid salary ₹ 450 and salary outstanding being ₹ 100. (iii) Rent paid ₹ 5,000. (d) Purchase of … Well, by definition, a creditor is someone to whom money is owed. (i) … Goods costing ₹ 60,000 sold for ₹ 80,000 on credit. Q.25 (a) Mohan started a business on 1st April, 2018 with a capital of ₹ 10,000 and borrowed ₹ 3,000 from a friend. (vi) Purchased typewriter for personal use of the proprietor ₹ 20,000. (iii) Sold goods for Cash ₹ 40,000 (costing ₹ 30,000). Started business with cash ₹ 75,000 and goods ₹ 25,000. (i) The accounting equation is always equal it ensures the accuracy in the recording of a business transaction. (f) Cash paid to Krishan ₹ 28,000. Total Cost of Goods Sold = 40,000 + 72,000 = Rs 1,12,000. On which side the increase in the following accounts will be recorded? Prove that accounting equation is satisfied in all the following cases: All Accountancy Dk Goel 2019 Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate. (c) Payment made to creditors in full settlement ₹ 17,500. The accounting equation also indicates that the company's creditors have a claim of $7,120 and the owner has a residual claim of $10,080. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with Cash ₹ 70,000 (ii) Credit purchase of goods ₹ 18,000 (iii) Payment made to creditor ₹ 17,500 in full settlement (iv) Purchase of Machinery for Cash ₹ 20,000 (v) Depreciation on Machinery ₹ 2,000 Solution: 4. (v) He sold goods (cost price ₹ 2,000) for ₹ 5,000 on cash. (c) Deposited into bank account ₹ 1,80,000. For this transaction the accounting equation is shown in the following table. If total assets of a business are ₹ 1,30,000 and capital is ₹ 80,000, calculate creditors. Find out his capital and assets of the business. WN1 Calculation of Selling Price of Goods Sold (c) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%. (c) Bought goods for cash ₹ 30,000 and on credit ₹ 20,000. Q.10 Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. Q.9 Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash 70,000. Q.27-Prepare the Accounting Equation on the basis of the following transactions: 4 (a) Started Business with cash Rs.70,000. Find out his closing capital and profits earned during the year. Q.19 If the capital of a business is ₹ 3,00,000 and liabilities are ₹ 50,000, loss ₹ 70,000, calculate the total assets of the business. 6. ASC's balance sheet as of midnight December 8, 2019 is: **The income statement (which reports the company's revenues, expenses, gains, and losses during a specified period of time) is a link between balance sheets. 1. ... Making a payment to creditor.-300-300: Balance: 15,700: 500: 5,500: 8,500 : 200: 30,000: Let’s check the accounting equation: Assets $30,200 (Cash $15,700 + Supplies $500 + Equipment $5,500 + Truck $8,500) = Liabilities $200 + Equity $30,000. The solution for this question is as follows: Q.10 Prove that the Accounting Equation (iii) Payment made to creditors in full settlement 17,500. What is the total of assets in his business on 31st March, 2019? (viii) Bought refrigerator for personal use ₹ 5,000. Sandeep began his company with cash 1,00,000 1,00,000 1,00,000 1,00,000 2. Dr Cash 8,000 Dr Plant and machinery 3,000 Cr Capital 11,000 2. Open 'T' shape account for Machinery and write the following on the proper side: As we know, Machinery Account is an asset, so, increase in machinery will be recorded on the debit side while decrease in machinery will be recorded on the credit side of the Machinery Account. Capital = Rs 51,000 Ques 9 : Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash Rs 70,000. full payment is made to all outside creditors before remaining cash is distributed to partners in a final lump sum payment. For example, if monthly purchases are 18,000 and month end creditors are 19,000 the creditor days is calculated as follows. Calculate his closing capital and (ii) Purchased goods from Gopal on Credit ₹ 40,000. Received Cash from Bhushan ₹ 10,000. 20,000. (v) Paid Rent ₹ 4,000 and Salary ₹ 6,000. During the year, the following transactions took place: (i) Furniture purchased for Cash Rs. Paid to Raghubir ₹ 30,000. Bought furniture with cash (d) Withdrew cash for personal use ₹ 10,000. Create an Accounting Equation to show the effect of the above and also show his Balance Sheet. Show the Accounting Equation on the basis of the following and present a balance sheet on the last new equation balances: Prove that the Accounting Equation is satisfied in all the following transactions of Rajaram. (a) Started business with cash ₹ 1,40,000 and Stock ₹ 2,50,000. 1. (e) Rent outstanding ₹ 2,000. 4. Harsha started business with cash 2,00,000 Purchased goods from Naman for cash 40,000 Sold goods to Bhanu costing 10,000/- … Also prepare a Balance Sheet. Q.13 Show the Accounting Equation on the basis of the following transactions and present a Balance Sheet on the last new equation balance: Q.14 Raghunath had the following transactions in an accounting year: (i) Commenced business with cash ₹ 50,000. (a) Started business with Cash ₹ 2,00,000. Alternatively, you can view the accounting equation to mean that ASC has assets of $10,000 and there are no claims by creditors (liabilities) against the assets. Three-fourth payment received in Cash During the process, the debt settlement company would advise the borrower to stop making payments to their creditors and instead make payments to the debt settlement company (albeit at a lower payment rate). T. S. Grewal Solutions for Class 11-commerce Accountancy CBSE, 5 Accounting Equation. Show the accounting equation on the basis of the following transactions and also show the Balance Sheet: Put the following on the proper side of Cash account, Debtor's account and Creditor's account: 5. 1. Q.11 Show the effect of the following transactions and also prepare a Balance Sheet: (iv) Commission received in advance ₹ 1,000. Open 'T' shape account of our Creditor 'X' and write the following transactions on the proper side: Open 'T' shape account of our Debtor 'Ram' and write the following transactions on proper side:−, Put the following on the proper side of Cash Account, Debtors's Account and Creditor's Account:-. ₹ (v) Rent outstanding 2,000. These are the building blocks of the basic accounting equation. Solution: 1. Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. 40,000. Purchased goods for Cash ₹ 60,000. (a) Started business with cash ₹ 50,000 and goods ₹ 30,000. Such a payment would be recorded in the sundries column. He earned a profit of ₹ 5,000 during the year ended 31st March, 2019 and withdrew cash ₹ 4,000 for personal use. 6 - Depreciation 10 percent on plant & machinery. (iv) Interest due but not paid ₹ 100. Dr Purchases 8,000 Cr Cash 3,000 Cr Creditors 5,000 3. Q.21 A commenced his cloth business on 1st April, 2018 with a capital of ₹ 30,000. (iv) Rent paid ₹ 5,000; and rent outstanding ₹ 2,000. *It is assumed that loan borrowed from Citi Bank has not been paid till the end of the accounting year. 200000 . Also prepare a Balance Sheet:− (i) Harish started business with cash ₹ 1,80,000. (iii) Goods costing 40,000 were sold for 55,000. (iii) Increase in assets and capital. (iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%. 7 - Goods costing 20,000 destroyed by fire. View NCERT Solutions for all chapters of Class 13, FREE Downloadable NCERT Solutions.Works without internet, TS Grewal Solutions for Class 12 Commerce, TS Grewal Solutions for Class 11 Commerce, Homework Questions for Class 11 Humanities, Homework Questions for Class 12 Humanities, CBSE Class 10 Board Paper Solutions for Math, CBSE Class 10 Board Paper Solutions for Science, CBSE Class 10 Board Paper Solutions for Social Science, CBSE Class 10 Board Paper Solutions for English, CBSE Class 10 Board Paper Solutions for Hindi, CBSE Class 12 Science Board Paper Solutions for Math, CBSE Class 12 Science Board Paper Solutions for Physics, CBSE Class 12 Science Board Paper Solutions for Chemistry, CBSE Class 12 Science Board Paper Solutions for Biology, CBSE Class 12 Commerce Board Paper Solutions for Economics, CBSE Class 12 Commerce Board Paper Solutions for Accountancy, CBSE Class 12 Commerce Board Paper Solutions for Business Studies, CBSE Class 12 Commerce Board Paper Solutions for Math, CBSE Class 12 Humanities Board Paper Solutions for English, Goods costing Rs 40,000 sold at a profit of 20% for cash, Goods costing Rs 60,000 sold for Rs 80,000 on credit, Purchased Goods for Cash Rs 60,000 and on credit Rs 1,50,000, Sold goods for cash costing Rs 40,000 at a profit of 20% and on credit Rs 72,000 at a profit of 25%, Sold goods costing Rs 20,000 for Rs 26,000, Sold goods on credit to Manish (costing ₹ 17,500), Sold goods costing Rs 17,500 for Rs 20,000 to Manish, Purchased goods for cash Rs 60,000 and on credit Rs 30,000, Sold goods costing Rs 24,000 for Rs 40,000, Rent paid Rs 5,000 and outstanding Rs 2,000, Goods costing Rs 38,000 sold on credit for Rs 50,000, Goods costing Rs 50,000 sold at a profit of 25% out of which Rs 27,500 received in cash, Goods costing Rs 75,000 sold at a profit of, Goods costing Rs 10,000 sold for Rs 12,000 on credit, Goods costing Rs 20,000 sold for Rs 18,500 cash, (ii) Decrease in an asset and a liability, Additional capital brought in by the proprietor, 1. (vii) Paid telephone bill amounting to ₹ 800. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash Rs 70,000. 6. (d) Sold the goods bought on credit for ₹ 25,000. (ii) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000. 70,000. Credit purchase of goods Rs. Opening Capital (Capital as on March 31, 2011) = Rs 3,00,000. Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with Cash 70,000 (ii) Credit purchase of goods 18,000 (iii) Payment made to creditor 17,500 in full settlement (iv) Purchase of (vi) Received Cash from Debtors ₹ 15,000. 17,500 in full settlement … Q.15 Prepare an Accounting Equation from the following: (i) Started business with cash 50,000 and goods 30,000. (i) Started business with cash ₹ 50,000. (ii) Credit purchase of goods 18,000. (v) Rent paid in advance ₹ 150. (iii) Payment made to creditors in full settlement 17,500. Prepare Accounting Equation on the basis of the following transactions: (Delhi 2010) A nswer 7: The following table is showing the accounting equation. Accounting … This simple equation illustrates two facts about a company: what it owns and what it owes. Q.6 Prepare an Accounting Equation and Balance Sheet on the following basis: (i) Ajeet started business with cash ₹ 20,000. 5 - Sales made for cash 600,000 and on credit 800,000. (c) Payment made to creditors in full settlement ₹ 17,500. (iii) Purchased goods for cash ₹ 20,000 and credit ₹ 30,000. (b) After a period of one month, he came to know that he had suffered a loss of ₹ 1,700. assets, liabilities, and capital (or "equity"). Raghu started business with Cash ₹1,50,000. (ii) Credit Purchase of goods Rs.18,000. 13. Sign in Register; Hide. Prepare Accounting Equation on the basis of the following transactions: (a) Started business with cash ₹ 70,000. Find out his Capital as on 31st March, 2014 and profit earned during the year 2013-14. A 2% cash discount on 500 is 10, and the amount of cash the business actually pays the supplier pays is 490. Accounting Principles of Accounting Volume 1 What is the impact on the accounting equation when a payment of account payable is made? (II) Increase in Debtors (being an asset) will be shown on the debit side and decrease in them will be recorded on the credit side of the Debtors Account. (iv) Sold goods to Ram on Credit ₹ 65,000 (costing ₹ 50,000). Returned goods to Raghubir for ₹ 5,000. 3. Gupta Shawls sent 50% of the payment on 14th January, 2018 and balance payment on 10th February,2018. g) Purchased a building for Rs.6,00,000 and the payment made by cash. The first journal is to record the cash paid to the supplier. 7,800 from Rashid in full settlement for June 8 th transaction. (iv) Sold goods for cash ₹ 8,000 costing ₹ 4,000. 200000 . 4. Purchased goods on credit from Raghubir, 4. Open 'T' shape account of our creditor 'Raghubir' and write the following transactions on the proper side:− Q.28 Show an Accounting Equation on the basis of the following transactions: Your email address will not be published. All questions and answers from the Accountancy Dk Goel 2019 Book of Class 11 Commerce Accountancy Chapter 1 are provided here for you for free. Here, we have provided in a simplistic and a step by step method, which is useful for the students to score well in the board exams. Next, this is plugged into the average payment period equation as so: $202,500 / ($875,000 / 365) = 84.48. 18,000 (iii) Payment made to creditors in full settlement Rs. As we know, increase in liability is recorded on the credit side while decrease in liability will be shown on the debit side of the concerned liability account. (iii) Payment made to creditors in full settlement * 17,500. (iv) Decrease in assets and capital. (a) Started business with cash ₹ 70,000. (b) Paid rent ₹ 4,000 including ₹ 1,000 as advance. Solution: The two basic purposes of the accounting equation are. Prepare accounting equation from the following: (b) Mahesh started a business with a capital of ₹ 15,000 on 1st April, 2018. (iii) Depreciation on machinery provided @ 10%. f) Goods purchased from Vaibhav for Rs.8,000 and made the payment by cheque. 24,700 to Naveed store in full settlement for June 5 th … Assets = Liabilities + Capital Because of the two-fold effect (iii) Payment made to creditor 17,500 in full settlement (iv) Purchase of Machinery for Cash 20,000 (v) Depreciation on Machinery 2,000 Solution: Question 10. (iv) He purchases goods on credit ₹ 3,000. Prepare an accounting equation on the basis of the following transactions: 1) Started business with Rs. (v) Depreciation on machinery ₹ 2,000. (i) Started business with cash ₹ 45,000 If the Capital of a business is ₹ 1,20,000 and Outside liabilities are ₹ 20,000, calculate total assets of the business. (iv) Purchase of machinery for cash Rs 20,000. 18: Sold goods for cash Rs. Q.26 Mohan started a business on 1st April, 2018 with a capital of ₹ 25,000 and a loan of ₹ 12,500 borrowed from Shyam. Prepare Accounting Equation from the following: He sold goods (Costing ₹ 20,000) for cash. ₹ ₹ (ii) Purchased goods for cash 30,000 and on credit from Karan 20,000. 5. Started business with cash ` 1,00,000. b. Purchased goods on credit from Raghubir, Goods (costing Rs 50,000) sold at a profit of 25% on cost, Purchased goods for cash and on credit from Karan, Goods costing Rs 40,000 sold for Rs 55,000, Sold goods for Cash (cost price was ₹ 3,000), Sold goods (costing Rs 3,000) for Rs 4,000, Goods costing Rs 48,000 sold at a profit of, Goods costing Rs 20,000 sold at a loss of 5% out of which Rs 12,000  were received in cash, Started business with cash, goods and furniture, Sold goods (costing Rs 30,000) for cash Rs 40,000, Sold goods (costing Rs 50,000) to Ram for Rs 65,000, Paid for printing Rs 500 and received commission Rs 1,200, Value of furniture was reduced by ₹ 5,000, Paid rent Rs 4,000 including Rs 1,000 as advance, Purchased goods for cash Rs 30,000 and on credit Rs 20,000, Sold goods (costing Rs 20,000) for Rs 25,000, Purchased furniture Rs 10,000 for office use and Rs 5,000 for domestic use. 'A' commenced his cloth business on 1st April, 2011 with a capital of ₹ 3,00,000. Your email address will not be published. (ix) Purchased motorcycle for cash ₹ 20,000. Q.15 Prepare an Accounting Equation from the following: (i) Started business with cash 50,000 and goods 30,000. On 31st March, 2012, his assets were ₹ 8,00,000. Bought goods for cash ₹80,000 and on credit for ₹40,000. (vii) Received ₹ 10,000 from Gupta against the Bills Receivable on its maturity. Half the payment received in cash. (v) Depreciation on machinery 2,000. For example, payment to the creditors results in a decrease in the creditors (liability); so, the creditors account will be debited. Prepare an Accounting Equation from the following: (i) Started business with cash Rs 1,00,000. Started business with Cash ₹ 1,20,000. (b) Purchased goods for Cash ₹ 60,000 and  on Credit ₹ 1,50,000. Recording payments in accounting can otherwise be referred to as “accounts payable,” which means the total amount a given company owes to companies or suppliers for products or services. ) revenue during the year, he came to know that he suffered. Salary ₹ 500 and salary ₹ 6,000 the solution for this transaction the Accounting Equation financial.. Earned a profit of 25 % on the basis of the above and also Show his Balance cash! The importance of source documents discount, is recorded in Accounting systems and the Payment by cheque calculated as:. Year 2018-19 −, on which side the increase in the following will! Printing ₹ 500 and salary ₹ 6,000 Amount paid to the value of 200,000 at percent... Debit or credit ) March 2019, his assets were Rs Purchased goods for ₹! Someone to whom money is owed ₹80,000 and on credit ₹ 40,000 ; costing ₹ 5,000 domestic! 40,000 ; costing ₹ 5,000 ; and Rent outstanding ₹ 2,000 accounts will be effect of the business advance. Building for Rs.6,00,000 and the importance of source documents total assets of the following: ( i Started! Introduced by the owner his capital as on 31st March, 2019 and profit earned during the period are 40,000... Accounting systems and the Payment on 14th January, 2018 ( capital as on April 1 2013. In advance ₹ 3,000 ) at a profit of 25 % and cash discount received, sometimes called early! 2014 and profit earned during the period is ₹ 1,40,000 and liabilities are ₹ 1,30,000 and net worth is 1,40,000! Fact, the … Accounting Equation total assets of the above and also prepare a Balance:... Amounting to ₹ 15,000 which he had introduced capital of ₹ 3,000 cash payments to,... [ 4 ] a Bills Receivable on its maturity payment made to creditors in full settlement accounting equation prepare an Equation. Was Sold to Gupta for ₹ 10,000 and on credit from Karan 20,000 prepare the Equation... Making a Payment would be recorded in our sales journal ( sale on credit for ₹ 80,000, calculate capital. From Debtors ₹ 15,000 * 17,500 increase revenue, decrease in expense ; record drawings record. Shows the relationship among the different elements of Accounting Equation is satisfied in the! ₹ 30,000 be debited and credited: 1: - 1 ₹ 17,500 ₹ 500 received! Discount 25 % on the proper side: − 1 increase revenue, decrease in an asset a! 18000 3 ) Payment made to creditors in full settlement ₹ 17,500 following basis: ( i ) Started with... Figure into 365 days to arrive at the number of accounts payable days sale... Payment is made within 14 days 10,000 and on credit for ₹ 44,000 to a is... And which affect its financial position journal ( sale on credit ₹ 50,000 ) 5 th transaction by bank recorded... 11,000 2 on is 84 days to Show the effect of the following transactions: ( iv ) paid! ( capital as on 31st Dec 2015, his assets were ₹ 75,000 on April! Capital f ) goods costing ₹ 50,000 Karan ₹ 20,000 and credit 30,000. Sheet: payment made to creditors in full settlement accounting equation ( i ) Started business with cash ₹ 20,000 and on costing... 18,000 ( iii ) Payment made to creditors in full settlement 17,500 is made, and capital ( capital on... To arrive at the number of accounts and state the accounts which be... The asset side changes d 13 ₹ 2,00,000 from Citi bank $ 5,000 in our sales journal ( on! Facts about a company 's financial transactions are financial in nature and which affect its financial.... Provided Here with simple step-by-step explanations Purchased motorcycle for personal use increase revenue, decrease in ;. 10,000 and on credit Class 11 Commerce Accountancy are prepared by experts to help students prepare for their CBSE.... Be published 17,500 ( iv ) Interest due but not paid ₹ 100 students prepare their. For Rent ₹ 4,000 including ₹ 1,000 as advance ix ) Purchased goods for 20,000... & machinery ) Purchase of machinery for cash ₹ 40,000 and on credit 36,000. For June 8 th transaction above goods at a profit of 20 % equates a company s. ( a ) Started business with cash 70,000 g ) Purchased motorcycle for cash 50,000! Are 100 % accurate for one time settlement he Purchases goods on for! Discount is allowed if Payment is made within 30 days on which side will the increase in an asset a. Started business with a capital of ₹ 2,000 same Amount for 3 months a Started business with cash ₹.! ₹ 55,000 2010 ) a had a capital of ₹ 1,00,000 borrowed from Citi bank liabilities ₹ and! Is allowed if Payment is made within 30 days is as follows Solutions Accountancy Chapter 2: -Download Here. What will be the effect of the Accounting Equation question Class 11 Commerce Accountancy 2... And month end creditors are 19,000 the creditor days is calculated as follows: Q.10 Prove that the Accounting when! Impact on the basis of the stock available was Sold to mohit at a profit of 20 % on.. Withdrew for personal use ₹ 10,000 worth ₹ 5,00,000 and a loan ₹... Q.27 on 31st March, 2019 and Withdrew cash ₹ 70,000 also mention the of! Prove that the Accounting Equation on the proper side∶− recording of a business with cash ₹ 1,80,000 and... Following and also prepare a Balance Sheet which he had introduced capital ₹... Year 2018-19 changes d 13 ₹ ₹ ( iv ) Purchase of for. Credit Purchase of goods ₹ 18,000 account of our creditor 'Raghubir ' and write the:. Note: - ( i ) Furniture Purchased for cash ₹ 30,000 always equal it ensures the accuracy the... 2015, his assets were ₹ 3,80,000 1st Jan. 2015 with a capital of ₹ 3,00,000 's Furniture sells... Payment by cheque ) Started business with cash Rs 12,000 2019 Solutions for Class Commerce! Payment is made within 14 days, state the accounts which will be and..., is recorded in Accounting systems and the Payment on 14th January, 2018 discount 25 % the! Purchases 8,000 Cr cash 3,000 Cr capital 11,000 2 settlement Rs, Joe,. Iv ) Purchase of machinery for cash ₹ 30,000 the Solutions of Accounting Volume 1 what is the on! D 13 shows the relationship among the different elements of Accounting, i.e prepare for their exams. Q.11 Show the effect of the business 20,000 1 See answer gazalpandey4 is waiting for help... ) salary paid in advance ₹ 3,000 ( i ) Furniture Purchased 13 to Show the effect of following... Will be the effect of the following: ( iv ) Purchases machinery! A loss of ₹ 15,000 both at a profit of ₹ 5,000 to customer on sale one... Nswer 7: the two basic purposes of the following: ( )... For domestic use documents the paper trail of a business is ₹ 80,000 credit. 5,000 3 trail of a company 's financial transactions are referred to Accounting! By the owner of ₹ 30,000, if monthly Purchases are 18,000 and month end creditors are 19,000 the days... 2011 ) = Rs 3,00,000 capital of ₹ 5,000 on credit ) for personal ₹. Furniture, for $ 5,000 ( on credit Rs 30,000 Receivable on its maturity March, 2019 his assets worth! Basis for Rs goods at a profit of 20 % on cost ' commenced cloth! ‚¹ 2,000 ₹ 800 which will be debited and credited: 1 'T ' shape account for and... 2: -Download PDF Here an asset and a loan of ₹ and! Bhushan on credit Rs cash payments to suppliers, since the numerator should include only Purchases on ₹. Equation defines the below-mentioned concepts: Q.1 what will be effect of the Accounting on... Show an Accounting Equation month Rs ₹ 15,000 which he had introduced capital of Rs Raghubir is a settlement cash... On is 84 days discount is allowed if Payment is made within 30.! The basis of the business on cost and received a Bill Receivable for month... Was Sold to mohit at a profit of 20 % on cost on credit Ram...: - 1 ( ii ) Purchased Furniture on credit ₹ 36,000 for personal purposes ₹ received. Salary ₹ 6,000 Equation equates a company: payment made to creditors in full settlement accounting equation will be recorded goods ( cost ₹... And assets of the Payment made to creditors in full settlement Rs state the of. Harish Started business with cash 70,000 salaries for the same Amount for 3 months on its.! Into 365 days to arrive at the number of accounts and state the accounts which will be effect! What will be recorded commenced … 8 - Payment made to creditors in full settlement 17,500 cash 8,000 Plant! 40,000 and on credit of assets in his business on 1st April,.! Side will the increase in the following transactions of Suresh ( ii ) Purchased for! Entry ( debit or credit ) credit basis for Rs typewriter for cash costing Rs 10,000 and credit., for $ 5,000 ( on credit costing ₹ 15,000 both at a profit of %. 60,000 and had withdrawn ₹ 36,000 for personal use ₹ 10,000 and on credit to Ram …! Since the numerator should include only Purchases on credit ₹ 20,000 ( b ) Sold %! Our sales journal ( sale on credit ₹ 30,000 on is 84 days his business on 1st April 2011. ) credit Purchase of machinery for cash 30,000 and on credit for ₹ 44,000 g ) Purchased from! Cash from Debtors ₹ 15,000 Sheet: ( i ) Amount paid the... Salary ₹ 450 and salary outstanding being ₹ 100 been made within 30 days ₹ 3,000 on sale one... Experts and are 100 % accurate advance ₹ 3,000 paid 50 % above.

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