Question

Prepare the Accounting Equation for the following .Each carries 5 Marks Each

Perform the Accounting Equation for the following below

The details of the business transactions are given below

Exercise 2   (5 points)

Following are the accounting transactions relating to Mr. P's business. Use the accounting equation to show their effect on his assets, liabilities and capital.

1. Commenced business with a Capital of 50,000
2. Bought Machinery for cash 10,000
3. Purchased goods for cash 15,000
4. Purchased goods from A on credit 5,000
5. Sold goods for cash 10,000
6. Paid to A 2,000
7. Sold goods to B on credit 3,000
8. Paid into Bank 6,000
9. Paid to A by cheque 1,000
10. Received from B a cheque for 2,000

Exercise 3   ( 5 points) State whether the following events form accounting transactions or not for the business of Mr. M (proprietor)

1. Mr. M started business with capital (brought in cash) 20,000
2. Paid salaries to staff 3,000
3. Purchased Machinery for 10,000 in cash
4. Placed an order with Sen & Co. for goods for 2,000
5. Opened a bank account by depositing 2,000
6. Received pass book from bank
7. Appointed Mr. B. Sen as manager on a salary of 1,000 per month
8. Received interest from bank 300
9. Received a price list from B

1. Started business with capital 1,00,000
2. Bought furniture 25,000
3. Bought goods for cash 20,000
4. Bought goods from Ram on Credit 5,000
5. Sold goods for cash for 15,000
6. Sold goods to Shyam on credit 8,000
7. Paid cash to Ram 4,000
8. Received cash from Shyam 5,000
9. Paid Cash into Bank 25,000
10. Withdrawn from bank 10,000

Answer 1

Note:

In exercise 3, the following transactions were not accounting transactions.

1. Placed an order with Sen & Co. for goods for 2,000

2. Received pass book from bank

3. Appointed Mr.B.Sen as manager on a salary of 1,000 per month

4. Received a price list from B