Problems based on Accounting Equation
Q.1 Show the effect of the following transactions on the Accounting Equation:
i. Started business with cash ₹ 50,000.
ii. Salaries paid ₹ 2,000.
iii. Wages Outstanding ₹ 200.
iv. Interest due but not paid ₹ 100.
v. Rent paid in advance ₹ 150.
Q.2 What will be the effect of the following on the Accounting Equation?
i. Harish started business with cash ₹ 18,000
ii. Purchased goods for Cash ₹ 5,000 and on credit ₹ 2,000
iii. Sold goods for cash ₹ 4,000 (costing ₹ 2,400)
iv. Rent paid ₹ 1,000 and rent outstanding ₹ 200
Q.3 Prepare Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000 and Goods ₹ 20,000.
(ii) Sold goods worth ₹ 10,000 for cash ₹ 12,000.
(iii) Purchased furniture on credit for ₹ 30,000.
Q.4 Prepare an Accounting Equation on the following basis:
(i) Ajeet started business with cash ₹ 20,000.
(ii) He purchased furniture for ₹ 2,000.
(iii) He paid rent of ₹ 200.
(iv) He purchases goods on credit ₹ 3,000.
(v) He sold goods (cost price ₹ 2,000) for ₹ 5,000 on cash.
Q.5 Prepare an Accounting Equation from the following:
(i) Started business with cash ₹ 1,00,000.
(ii) Purchased goods for cash ₹ 20,000 and on credit ₹ 30,000.
(iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%.
Q.6 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 creditors in full settlement ₹ 17,500.
(iv) Purchase of machinery for cash ₹ 20,000.
(v) Depreciation on machinery ₹ 2,000.
Q.7 Prove that the Accounting Equation is satisfied in all the following transactions of Suresh.
i. Commenced business with cash ₹ 60,000.
ii. Paid rent in advance ₹ 500.
iii. Purchased goods for cash ₹ 30,000 and credit ₹ 20,000.
iv. Sold goods for cash ₹ 30,000 costing ₹ 20,000.
v. Paid salary ₹ 500 and salary outstanding being ₹ 100.
vi. Bought motorcycle for personal use ₹ 5,000.
Q.8 Show the effect of the following transactions and also prepare a Balance Sheet:
i. Started business with cash ₹ 60,000.
ii. Rent received ₹ 2,000.
iii. Accrued interest ₹ 500.
iv. Commission received in advance ₹ 1,000.
v. Amount withdrawn ₹ 5,000.
Q.9 Prove that the Accounting Equation is satisfied in all the following transactions of Sameer Goel:
i. Started business with cash ₹ 10,000.
ii. Paid rent in advance ₹ 300.
iii. Purchased goods for cash ₹ 5,000 and credit ₹ 2,000.
iv. Sold goods for cash ₹ 8,000 costing ₹ 4,000.
v. Paid salary ₹ 450 and salary outstanding being ₹ 100.
vi. Bought motorcycle for personal use ₹ 3,000.
Q.10 Raghunath had the following transactions in an accounting year:
i. Commenced business with cash ₹ 50,000.
ii. Paid into bank ₹ 10,000.
iii. Purchased goods for cash ₹ 20,000 and credit ₹ 30,000.
iv. Sold goods for cash ₹ 40,000 costing ₹ 30,000.
v. Rent paid ₹ 500.
vi. Rent outstanding ₹ 100.
vii. Bought furniture ₹ 5,000 on credit.
viii. Bought refrigerator for personal use ₹ 5,000.
ix. Purchased motorcycle for cash ₹ 20,000.
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