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प्रश्न
What is the accounting equation?
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उत्तर
The accounting equation shows the relationship between assets, liabilities, and capital. It is based on the dual aspect concept of accounting, which means that every business transaction has two effects. The equation is expressed as:
Assets = Liabilities + Capital
or
Capital = Assets − Liabilities
This equation indicates that the total assets of a business are always equal to the combined claims of outsiders (liabilities) and the owner (capital).
In a balance sheet, the total of the assets side and the total of the liabilities side are always equal. Every transaction increases or decreases one side of the equation, but an equal effect is also made on the other side, thereby maintaining equality at all times.
संबंधित प्रश्न
‘Cash withdrawn by the proprietor from the business for his personal use’ causes ____________.
The incorrect accounting equation is _____________.
How are personal accounts classified?
Write a brief note on accounting equation approach of recording transactions.
Classify the accounts with suitable examples.
What are the three different types of personal accounts?
Complete the accounting equation.
Assets = Capital + Liabilities
₹ 1,00,000 = ₹ 80,000 + ?
For the following transactions, show the effect on the accounting equation.
- Raj started business with cash - ₹ 40,000
- Opened bank account with a deposit of - ₹ 30,000
- Bought goods from Hari on credit for - ₹ 12,000
- Raj withdrew cash for personal use - ₹ 1,000
- Bought furniture by using debit card for - ₹ 10,000
- Sold goods to Murugan and cash received - ₹ 6,000
- Money withdrawn from bank for office use - ₹ 1,000
Create an accounting equation on the basis of the following transactions:
- Rakesh started business with a capital of ₹ 1,50,000
- Deposited money with the bank ₹ 80,000
- Purchased goods from Mahesh and paid through debit card ₹ 25,000
- Sold goods (costing ₹ 10,000) to Mohan for ₹ 14,000 who pays through debit card
- Commission received by cheque and deposited the same in the bank ₹ 2,000
- Paid office rent through ECS ₹ 6,000
- Sold goods to Raman for ₹ 15,000 of which ₹ 5,000 was received at once
Create an accounting equation on the basis of the following transactions:
- Started business with cash ₹ 80,000 and goods ₹ 75,000
- Sold goods to Shanmugam on credit for ₹ 50,000
- Received cash from Shanmugam in full settlement ₹ 49,000
- Salary outstanding ₹ 3,000
- Goods costing ₹ 1,000 given as charity
- Insurance premium paid ₹ 3000
- Out of insurance premium paid, prepaid is ₹ 500
