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Accounting Equation - Questions

The document contains several accounting equation questions related to starting a business, purchasing and selling goods, paying expenses, and introducing capital. Transactions include starting a business with cash, purchasing goods for cash and credit, selling goods for cash, paying rent and salaries, and introducing additional capital. Effects on the accounting equation and balance sheets are examined.

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Shaji Raroth
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108 views

Accounting Equation - Questions

The document contains several accounting equation questions related to starting a business, purchasing and selling goods, paying expenses, and introducing capital. Transactions include starting a business with cash, purchasing goods for cash and credit, selling goods for cash, paying rent and salaries, and introducing additional capital. Effects on the accounting equation and balance sheets are examined.

Uploaded by

Shaji Raroth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Accounting Equation- Questions to practice

Q.1 What will be effect of the following on the Accounting Equation?


(i) Started business with cash ₹ 45,000
(ii) Opened a Bank Account with a deposit of ₹ 4,500
(iii) Bought goods from M\s. Sun & Co. for ₹ 11,200

Q.2 Show the Accounting Equation for the following transactions:

(i) Gopinath started business with cash 25,000

(ii) Purchased goods from Shyam 10,000

(iii) Sold goods to Sohan costing ₹ 1,800 1,500

(iv) Gopinath withdrew from business 5,000

Q.3 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.4 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.5 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.6 Prepare an Accounting Equation and Balance Sheet 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.7 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.8 Develop an Accounting Equation from the following transactions:

(i) Mohan commenced business with cash 50,000

(ii) Purchased goods for cash 30,000

(iii) Purchased goods on credit 20,000

(iv) Sold goods (costing ₹ 10,000) for 12,000

(v) Bought furniture on credit 2,000

(vi) Paid cash to a creditor 15,000


(vii) Salary paid 1,000

Q.9 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.10 Prove that the Accounting Equation is satisfied in all the following transactions of Suresh.
Also prepare a Balance Sheet.
(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 11. Prepare the accounting equation on the basis of the following:

1. Rakesh commenced business with cash Rs 75000 and cheque of Rs 75000 to open a
bank account
2. Furniture purchased for cash Rs 20000
3. Purchased goods from Mahesh on credit Rs 25000
4. Sold goods(costing Rs 10000) to Mohan for cash Rs 14000
5. Additional capital introduced Rs 20000
6. Commission received in advance Rs 2000
7. Paid to creditor(Mahesh) in full settlement Rs22500
8. Sold goods costing( Rs 15000) for Rs 18000 out of which Rs5000 received in cash
9. Depreciation on furniture provided@10%
10. Withdrew cash for personal use from Bank Rs 500
11. Received interest from bank Rs 100
12. Paid Rent Rs 200 and petty expenses Rs 250

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