# Class-11th | Chapter-2 | Accounting Equation | Question No. 1 to 5 | Ts grewal solution | 2020-21

#### Question 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

 S. No. Transactions Assets = Liabilities + Capital Cash ( `) + Bank ( `) + Stock ( `) = Creditors ( `) ( `) (i) Started business with cash 45,000 = 45,000 45,000 = 45,000 (ii) Opened a Bank Account with a deposit – 4,500 + 4,500 = 40,500 + 4,500 = 45,000 (iii) Bought goods from M/s. Sun & Co. 11,200 = 11,200 40,500 + 4,500 + 11,200 = 11,200 + 45,000

 Total Assets = Cash + Bank + Stock = 40,500 + 4,500 + 11,200 = ` 56,200 Liabilities = 11,200 Capital = 45,000

#### Question 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

 S. No Transactions Assets = Liabilities + Capital Cash ( `) + Stock ( `) + Debtors ( `) Creditors ( `) ( `) (i) Gopinath Started business with 25,000 = 25,000 25,000 = 25,000 (ii) Purchased goods from Shyam 10,000 10,000 25,000 + 10,000 = 10,000 + 25,000 (iii) Sold goods to Sohan – 1,800 + 1,500 = – 300 25,000 + 8,200 + 1,500 = 10,000 + 24,700 (iv) Gopinath withdrew from business –5,000 = – 5,000 20,000 + 8,200 + 1,500 = 10,000 + 19,700

 Assets = 20,000 + 8,200 + 1,500 = ` 29,700 Liabilities = ` 10,000 Capital = ` 19,700

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#### Question 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.

 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 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

 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

#### Question 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.

 S. No. Transaction Assets = Liabilities + Capital Cash ( `) + Stock ( `) + Furniture ( `) = Creditors ( `) ( `) (i) Started business with cash  ` 1,00,000 and Goods  ` 20,000 1,00,000 + 20,000 = 1,20,000 1,00,000 + 20,000 = 1,20,000 (ii) Sold goods worth  ` 10,000 for cash  ` 12,000 12,000 – 10,000 = + 2,000 1,12,000 + 10,000 = 1,22,000 (iii) Purchased furniture on credit for  ` 30,000 30,000 = 30,000 1,12,000 + 10,000 + 30,000 = 30,000 + 1,22,000

 Assets = 1,12,000 + 10,000 + 30,000 = ` 1,52,000 Liabilities = ` 30,000 Capital = ` 1,22,000