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Question
Complete the accounting equation.
Assets = Capital + Liabilities
₹ 2,00,000 = ? + ₹ 40,000
Sum
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Solution
Capital = Assets – Liabilities
Capital = ₹ 2,00,000 – ₹ 40,000
Capital = ₹ 1,60,000
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Approaches of Recording Transactions
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Chapter 3: Books of Prime Entry - Exercises [Page 59]
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For the following transactions, show the effect on the accounting equation.
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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
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