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CBSE Class 11-commerce Answered

What will be effect of the following on the accounting equation? Ramesh started business with cash Rs.50,000 Purchased goods for cash Rs.5,000 and on credit Rs.2,000 Sold goods for cash Rs.8,000 (costing Rs.3,500) Rent paid Rs.5,000 and rent outstanding Rs.1,200

Asked by Topperlearning User | 14 Jun, 2016, 10:03: AM

Expert Answer

S.No.	Explanation	Assets		=	Liabilities + Capital
		Cash +	Stock	=	Creditor +	Outstanding Rent +	Capital
i.	Started business with cash Rs.50,000	(+)50,000	0		0	0	50,000
		50,000 +	0	=	0 +	0 +	50,000
ii.	Purchased goods for cash Rs.5,000 and on credit Rs.2,000	(-)5,000	(+)7,000		(+)2,000	0	50,000
		45,000+	7,000	=	2,000 +	0 +	50,000
iii.	Sold goods for cash Rs.8,000 (costing Rs.3,500)	(+)8,000	(−)3,500	=	0	0	(+) 4,500
		53,000+	3,500	=	2,000 +	0 +	54,500
iv.	Rent paid Rs.5,000 and rent outstanding Rs.1,200	(−) 5,000	0		0	(+)1,200	(− )6,200
		48,000+	3,500	=	2,000 +	1,200 +	48,300

Answered by | 14 Jun, 2016, 12:03: PM

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