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Question
A firm has assets of ₹ 1,00,000 and the external liabilities of ₹ 60,000. Its capital would be ___________.
Options
₹ 1,60,000
₹ 60,000
₹ 1,00,000
₹ 40,000
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Solution
A firm has assets of ₹ 1,00,000 and the external liabilities of ₹ 60,000. Its capital would be ₹ 40,000.
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- Raj started business with cash - ₹ 40,000
- Opened bank account with a deposit of - ₹ 30,000
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- Sold goods to Murugan and cash received - ₹ 6,000
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- Murugan commenced business with cash ₹ 80,000
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- Bought goods from Kumar for ₹ 5,000 and deposited the money in CDM.
- Introduced additional capital of ₹ 10,000
Create an accounting equation on the basis of the following transactions:
- Rakesh started business with a capital of ₹ 1,50,000
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- 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
