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Practical Questions: Accountancy XI

Practical Questions
Accounting Equation

Rule: Assets= Capital + Liabilities

Practical Questions

  1. Started business with cash and bank balance Rs. 1,00,000 and Rs. 50,000 respectively.

  2. Goods costing Rs. 10,000 sold for Rs. 12,000 on credit.

  3. Goods purchased on credit Rs. 5,000.

  4. Received from debtor Rs. 11,800 in full settlement.

  5. Paid to creditor Rs. 4,700 in full settlement.

  6. Loan taken from Everest bank limited Rs. 20,000.

  7. Rent paid rs. 12,000 including pre-paid Rs. 2,000.

  8. Commission received Rs. 6000 including advance Rs. 1,000.

  9. Furniture costing rs. 1,500 sold for rs. 1,200 on credit.

  10. Machinery costing rs. 5,000 destroyed by fire and Insurance Company admitted claim rs. 3,000.

  11. Interest on loan paid rs. 1,800 and still payable rs. 200.

  12. Donation paid rs. 1,000.

  13. Rent received rs. 2,000 and still receivable rs. 200.

Accounting Equation 5 marks

SN   Transaction   Asset   Capital   Liabilities  
1   Started business with cash and bank balance   1,00,000 cash   50,000 bank balance   1,50,000   0  
Starting Equation   1,50,000   =   1,50,000   +   0  
2   Goods sold on credit with profit   12,000 debtor   (10,000) goods   2000 (profit)   0  
New Equation   1,52,000   =   1,52,000   +   0  
3   Goods purchased on credit   5000 Goods   5000 (creditor)  
New Equation   1,57,000   =   1,52,000   +   1,57,000  
4.   Received from debtor in full settlement   11,800 cash   (12,000) debtor   -200 (discount allowed)   5,000  
New equation   1,56,800   =   1,51 ,800 +   5,000  
5.   Paid to creditor in full settlement   (4,700) cash   300 (discount received)   0  
New Equation   1,52,100   =   1,52,100   +   0  
6   Loan taken from Everest bank limited   20,000 cash   0   20,000  
New Equation   1,72,100   =   1,52,100   +   20,000  
7   Rent paid including prepaid   (10,000) cash   (2,000) prepaid rent   (12,000) expenses   0  
New Equation   1,60,100   =   1,40,100   +   20,000  
8   Commission received including advance   6,000 cash   5,000 (income)   1,000  
New Equation   1,66,100   =   1,45,100   +   21,000  
9   Furniture sold on loss   1200 cash   (1500) furniture   (300) loss   0  
New Equation   1,65,800   =   1,44,800   +   21,000  
10   Machinery destroyed by fire and insurance co. admitted claim partially   3,000 (insurance co.)   (5,000) machinery   (2,000) loss   0  
New Equation   1,63,800   =   1,42,800   +   21,000  
11   Interest on load paid and still payable   (1800) cash   (2000) interest   200  
New Equation   1,62,000   =   1,40,800   21,200  
12   Donation Paid   (1000) cash   (1000) expenses   0  
New Equation   1,61,000   =   1,39,800   +   21,200  
13   Rent received and still receivable   2,000 cash   200 receivable   2,200 (income)   0  
Final Equation   1,63,200   =   1,42,000   +   21,200  

Therefore, Assets= 1,63,200, Capital=1,42,000 and Liabilities= 21,200.

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