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11th | Accounting Equation | Question No. 6 to 8 | Ts Grewal Solution 2022-2023

Chapter 5 - Accounting Equation

 

Question 5:


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)
(vii)

 Paid cash to a creditor
 Salary paid

15,000
1,000

Answer:


S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

( `)

+

Stock

( `)

+

Furniture

( `)

=

Creditors

( `)

 

 

( `)

(i)

Mohan commenced business with cash

50,000

 

 

 

 

=

 

 

 50,000

 

 

50,000

 

 

 

 

=

 

 

 50,000

(ii)

Purchased goods for cash

 – 30,000

+

30,000

 

 

=

 

 

 

 

 

20,000

+

30,000

 

 

=

 

 

50,000

(iii)

Purchased goods on credit

 

 

20,000

 

 

=

20,000

 

 

 

 

20,000

+

50,000

 

 

=

20,000

+

50,000

(iv)

Sold goods costing  ` 10,000 for  ` 12,000

12,000

+

– 10,000

 

 

=

 

 

2,000

(profit)

 

 

32,000

+

40,000

 

 

=

20,000

+

52,000

(v)

Bought furniture on credit

 

 

 

 

2,000

=

2,000

 

 

 

 

32,000

+

40,000

+

2,000

=

22,000

+

52,000

(vi)

Paid cash to a creditor

 – 15,000

 

 

 

 

=

– 15,000

 

 

 

 

17,000

+

40,000

+

2,000

=

7,000

+

52,000

(vii)

Salary Paid

 – 1,000

 

 

 

 

=

 

 

– 1,000 (expenses)

 

 

16,000

+

40,000

+

2,000

=

7,000

+

51,000

 

Assets

=

 

16,000 + 40,000 + 2,000

 

=

 `

58,000

Liabilities

=

 `

7,000

Capital

=

 `

51,000

Question 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.

Answer:


 

S. No.

Transaction

Assets

=

Liabilities

+

Capital

Cash

( `)

+

Stock

( `)

+

Machinery

( `)

 

 

( `)

 

 

( `)

(i)

Started business with Cash  ` 70,000

70,000

 

 

 

 

 

 

 

70,000

 

 

70,000

 

 

 

 

 

 

 

70,000

(ii)

Credit purchase of goods  ` 18,000

 

 

18,000

 

 

=

18,000

 

 

 

 

70,000

+

18,000

 

 

=

18,000

+

70,000

(iii)

Payment made to creditor  ` 17,500 in full settlement

 – 17,500

 

 

 

 

=

– 18,000

+

500

(Discount Received)

 

 

52,500

+

18,000

 

 

=

 

 

70,500

(iv)

Purchase of Machinery for Cash  ` 20,000

 – 20,000

 

 

 

20,000

 

 

 

 

 

 

32,500

+

18,000

+

20,000

=

 

 

70,500

(v)

Depreciation on Machinery  ` 2,000

 

 

 

 

– 2,000

 

 

 

– 2,000

(Depreciation)

 

 

32,500

+

18,000

+

18,000

=

 

 

68,500

 

Assets

=

 

32,500 + 18,000 + 18,000

 

=

 `

68,500

Liabilities

=

 

NIL

Capital

=

 `

68,500

Question 7:


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.
 

Answer:


S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

( `)

+

Advances Expenses

( `)

=

Outstanding Expenses

( `)

 

 

( `)

(i)

Started business with Cash

50,000

 

 

=

 

 

50,000

 

 

50,000

 

 

=

 

 

50,000

(ii)

Salaries paid

 – 2,000

 

 

=

 

 

– 2,000

(expenses)

 

 

48,000

 

 

=

 

 

48,000

(iii)

Wages Outstanding

 

 

 

=

200

+

– 200

(expenses)

 

 

4,800

 

 

=

200

 

47,800

(iv)

Interest due but not paid

 

 

 

=

100

+

– 100

(expenses)

 

 

48,000

 

 

=

300

+

47,700

(v)

Rent paid in advance

 – 150

+

150

=

 

 

 

 

 

47,850

+

150

=

300

+

47,700

 

Assets

=

 

47,850 + 150

 

=

 `

48,000

Liabilities

=

 `

300

Capital

=

 `

47,700

Question 8:


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

Answer:


S. No.

Transactions

Assets

=

Liabilities

+

Capital

Cash

( `)

+

Stock

( `)

=

Creditors

( `)

+

Outstanding Rent

( `)

 

 

( `)

(i)

Harish started business with cash

18,000

 

 

=

 

 

 

 

18,000

 

 

18,000

 

 

=

 

 

 

 

18,000

(ii)

Purchased goods for Cash  ` 5,000 and on credit  ` 2,000

– 5,000

+

7,000

=

2,000

 

 

 

 

 

 

13,000

+

7,000

=

2,000

 

 

+

18,000

(iii)

Sold goods for cash  ` 4,000 costing  ` 2,400

4,000

 

– 2,400

=

 

 

 

 

1,600

(Profit)

 

 

17,000

+

4,600

=

2,000

 

 

+

19,600

(iv)

Rent paid  ` 1,000 and Rent Outstanding  ` 200

– 1,000

 

 

=

 

 

200

 

– 1,200

 

 

16,000

+

4,600

=

2,000

+

200

+

18,400

 

Assets

=

 

16,000 + 4,600

 

=

 `

20,600

Liabilities

=

 

2,000 + 200

 

=

 `

2,200

Capital

=

 `

18,400

 

 

Ts Grewal Solution 2022-2023

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Chapter 5 – Accounting Equation 

 

Question No. 1 To 4
Question No. 5 To 8
Question No. 9 To 12
Question No. 13 To 16
Question No. 17 To 20
Question No. 21 To 24
Question No. 25 To 26