INDIAN SCHOOL MUSCAT

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INDIAN SCHOOL MUSCAT Senior Section Department of Commerce and Humanities Class : XI Worksheet- No 4: Accounting Equation Reference: T.S. Grewal Date of issue --------------2018 ACCOUNTANCY (055) Date of ubmission ------------------2018 Qno.

Goods purchased on credit Rs.7,000 c. Furniture purchased Rs.3,000 d. Paid to creditors Rs.2,000 e. Amount withdrawn by the proprietor Rs.4,000 f. Creditors accepted a bill for Rs.1,500 g.

1 INDIAN SCHOOL MUSCAT Senior Section Department of Commerce and Humanities Class : XI Worksheet- No 4: Accounting Equation Reference: T.S. Grewal Date of issue ACCOUNTANCY (055) Date of ubmission Qno. Question 1 Show the effect of the following business transactions on assets, liabilities and capital through accounting equation: a. Commenced business with cash Rs.20,000 b. Goods purchased on credit Rs.7,000 c. Furniture purchased Rs.3,000 d. Paid to creditors Rs.2,000 e. Amount withdrawn by the proprietor Rs.4,000 f. Creditors accepted a bill for Rs.1,500 g. Interest on capital Rs.1,000 h. Transfer from capital to loan Rs.5,000 2 Develop accounting equation from the following transactions: a. Mohan commenced business with cash Rs.50,000 b. Purchased goods for cash Rs.30,000 c. Purchased goods on credit Rs.20,000 d. Sold goods (cost Rs.10,000) for Rs.12,000 e. Bought furniture on credit Rs.2,000 f. Paid cash to a creditor Rs.15,000 3 Show the effect of following transactions on accounting equation and also prepare a balance sheet: a. Started business with cash amounting to Rs.35,000 and goods Rs.15,000 b. Salaries paid Rs.2,000 c. Wages outstanding Rs.200 d. Prepaid insurance Rs.700 e. Interest due but not paid Rs.100 f. Rent paid in advance Rs Show the effect of the following transactions on assets, liabilities and capital using accounting equation: a. Started business with cash Rs.60,000 b. Rent received Rs.2,000 c. Accrued interest Rs.500 d. Commission received in advance Rs.1,000 1 P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

2 5 Show the accounting equation on the basis of the following transactions: a) Manu started business with cash Rs.50,000 b) Purchased goods on credit Rs.4,000 c) Purchased goods for cash Rs.1,000 d) Purchased furniture Rs.500 e) Paid rent Rs.200 f) Withdrew for private use Rs.700 g) Received interest Rs.100 h) Sold goods on credit (cost Rs.500) for Rs.700 i) Paid to creditors Rs.400 j) Paid salaries Rs Prove that the Accounting Equation is satisfied in all the following transactions. Verify your result with Balance sheet of the last new equations: a) Anwar started business with cash Rs.20,000, Goods Rs.12,000 and Machine Rs.8,000 b) He purchased goods Rs.5,000 c) Sold goods(costing Rs.2,000) for Rs.2,500 d) Purchased goods on credit Rs.7,000 e) Payment made to creditors infull settlement Rs.6,900 f) Sold goods on credit(costing Rs.5,400) for Rs.6,000 g) Payment received from debtors Rs.5,800 discount allowed Rs.200 h) Salaries paid Rs.4,000 i) Wages outstanding Rs.400 j) Prepaid insurance Rs.100 k) Rent received Rs.300 l) Amount withdrawn Rs.3,000 m) Interest on drawing Rs.200 n) Depreciation on machinery Rs.800 o) Purchased goods on credit Rs.17,000 7 Use Accounting equation to show the effect of following transactions on assets, liabilities and capital and also show the final balance sheet. a) Started business with Cash Rs.70,000 b) Purchased goods on credit Rs.18,000 c) Purchased machinery Rs.20,000 d) Payment made to creditors in full settlement Rs.17,500 e) Depreciation to creditors in full settlement Rs.2,000 8 Prepare accounting equation on the basis of the following : a) Rahim started business with cash Rs.20,000 b) Rahim purchased furniture for cash Rs.2,000 c) Rahim paid rent Rs.200 d) Rahim purchased goods on credit Rs.3,000 e) Rahim sold goods(cost price Rs.2,000) for Rs.5,000 9 Arvind had the following transactions. Use accounting equation to shoe their effect on his assets, liabilities and capital a) Invested Rs.15,000 in cash as capital b) Purchased furniture for cash Rs.7,500 c) Purchased a building for Rs.15,000 giving Rs.5,000 in cash and the balance through a loan. d) Sold furniture costing Rs.1,000 for Rs.1,500 e) Purchased an old car for Rs.2,800 cash. f) Received cash as rent Rs.3,600 g) Paid cash Rs.500 for loan and Rs.300 for interest. 2 P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

3 h) Paid cash for household expenses Rs.300 i) Received cash for dividend on securities Rs Prove that the accounting equation is satisfied in all the following transactions of Suresh: a) Commenced business with cash Rs.60,000 b) Paid rent in advance Rs.500 c) Purchased goods for cash Rs.30,000 and credit Rs.20,000 d) Sold goods for cash Rs.30,000 costing Rs.20,000 e) Paid salary Rs.500 and salary outstanding Rs.100 f) Bought motorcycle for personal use Rs.5, Show the accounting equation on the basis of the following transactions and present a Balance sheet: a) Mohan commenced business with cash Rs.70,000 b) Purchased goods on credit Rs.14,000 c) Withdrew for private use Rs.1,700 d) Goods purchased for cash Rs.10,000 e) Paid wages Rs.300 f) Paid to creditors Rs.10,000 g) Sold goods on credit for Rs.15,000 h) Sold goods for cash (cost price was Rs.3,000) Rs.4,000 i) Purchased furniture for Rs Show the accounting equation on the basis of the following transactions and present a balance sheet. Ram and Mohan entered into a partnership agreement to deal in furniture. They contributed Rs.70,000 and Rs.50,000 as capital respectively. a) Timber purchased by them Rs.40,000 b) Wages paid to carpenters Rs.30,000 c) Furniture sold (costing Rs.40,000) Rs.50,000 d) Furniture sold on credit (costing Rs.9,000) Rs.10,000 e) Amount received from debtors Rs.9,900 and discount allowed Rs.100 f) Timber purchased on credit Rs.6,000 g) Furniture purchased Rs.5,000 h) Payment to creditors Rs.5,950 in full settlement. i) Amount withdrawn by Ram Rs. 2,000 and Mohan Rs.1, Analyse the effect of each transactions and prove that the accounting equation always remains balanced: a) Introduced Rs.8,00,000 as cash and Rs.50,000 by stock. b) Purchased plant for Rs.3,00,000 by paying Rs.15,000 in cash and balances at a later date. c) Deposited Rs.6,00,000 into the bank. d) Purchased office furniture for Rs.1,00,000 and made payment by cheque. e) Purchased goods worth Rs.80,000 for cash and Rs.35,000 on credit. f) Goods amounting to Rs.45,000 was sold for Rs.60,000 on cash basis. g) Goods costing Rs.80,000 was sold for Rs.1,25,000 on credit basis. h) Cheque issued to the supplier of goods worth Rs.35,000 i) Cheque received from a customer amounting to Rs.75,000 j) Withdrawn by owner for personal use Rs.25, Give one transaction for each of the following that will: 1. Increase an asset and Increase in liability 2. Decrease in asset and decrease in liability 3. Decrease an asset and decrease capital 15 How will you deal with the following items in Accounting Equation: 1. Interest on Capital 2.Interest on Drawings 3.Accrued Income 3 P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

4 4. Unearned Income 5.Prepaid Expenses 6.Outstanding Expenses 16 Calculate total assets if Capital is Capital is Rs.40,000, Creditors Rs.30,000, Revenue earned during the period Rs.75,000, Expenses incurred during the period Rs.20,000.Value of Stock unsold Rs.20, Peter has the following assets and liabilities as on 31st December 2010.Ascertain his capital: Cash Rs.2,500; Bank Rs.4750; Debtors Rs.1,800; Creditors Rs.2,200; Plant and Machinery Rs.8,000; Building Rs.20,000; Furniture Rs.2,400; Bills receivable Rs.5,650: Bills Payable Rs.2, Prepare an Accounting Equation from the following: 1. Started business with Cash Rs.50, Paid Salary Rs.5, Rent Outstanding Rs.1, Accrued Interest Rs.1, Interest on Capital Rs.2, Bought goods for cash Rs.30,000 and on Credit for Rs.50, Goods costing Rs.10,000 sold at a profit of 25%, out of which Rs.7,000 received in cash. 8.Purchased a Television for personal use Rs.2, Prepare Accounting Equation from the following: 1.Nitin started business with cash Rs.75,000; goods Rs.30,000; Machinery Rs.50,000 and Furniture Rs.25, /3rd of the above goods sold at a profit of 10% on cost and half of the payment is received In cash. 3.Depreciation on Machinery provided at 10%. 4. Cash withdrawn for personal use Rs.10, Interest on drawing 5%. 6. Goods sold to Jacob for Rs.5,000 and received a Bill Receivable for the same amount for three Months. 7.Received Rs.5,000 from Jacob against the Bill Receivable on its maturity. 20 Show the accounting equation on the basis of the following transactions & also show the Balance Sheet. 1. Started the business with Cash Rs.80,000; Goods Rs.30,000; Furniture Rs.40, Purchased goods on credit from Nidi, Rs.15,000 and on cash from Mera Rs.10, Bought a refrigerator for personal use Rs.5, Goods costing Rs.6,000 sold at the loss of 10% out of which Rs.2,000 received in cash. 5. Received cash from debtors Rs.3,200 in full settlement. 6. Sold goods for cash Rs.5, Introduced fresh capital Rs.1,00, Rent outstanding Rs.5, Accrued interest Rs.10, Prepare an Accounting Equation from the following: 1. Started the business with Cash Rs.1,00,000; goods Rs.50,000 and loan Rs.15, Goods costing Rs.24,000 sold at a profit of 331/3% and 3/4th payment received in Cash. 3. Paid three months rent in advance for office Rs.6, Goods withdrawn for personal use Rs.10, Interest on drawings at the rate of Goods given as charity Rs.1, Loss of Cash by theft Rs.1, Loan taken was repaid with interest Rs Purchased Securities Rs10, Sold Securities costing Rs.3000 for Rs.3, Prepare an Accounting Equation from the following information: Jacob Started business with Rs.15,00, P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

5 1. Opened a bank account in State Bank Of India with Rs.4,80, Bought Furniture for Rs.60,000 and a cheque was issued on the same day. 3.Bought Plant and Machinery for business for Rs.1,25,000 and advance of Rs.10,000 in cash is paid to M/s Ramjee Lal. 4. Goods purchased from M/s Sunil Traders for Rs.55, Goods costing Rs.25,000 sold to Rajani Enterprises for Rs.35, Paid Salary Rs.2,500 and Salary outstanding Rs.1, Depreciation on Plant and Machinery Rs.1, Prepare an Accounting Equation from the following information: Business started with Cash Rs.1,50, Goods purchased from Manisha Rs.36, Stationery purchased for cash Rs.2, Opened a bank account with SBI for Rs.32, Goods sold to Priya for Rs.16, Purchased goods from Namita for Rs.20, Insurance paid by cheque Rs.2, Cash withdrawn for household purpose Rs.5, Interest received Rs.250 in cash Rent paid in advance Rs Calculate the capital as on in each of the following cases 1. On the total assets and external liabilities were Rs.30,000 and Rs.900 respectively. During the year the proprietor earned Rs.3, If in the preceding case the proprietor had introduced additional capital Rs.3,000 and had withdrawn Rs.1,800 for personal use. 25 Calculate total equity and owners equity if: 1. Owner s equity in the beginning Rs.36, Equity of Creditors at the end Rs.30, Revenue during the period is Rs.42, Expenses during the same period are Rs.39, Show the effect of the following transactions on Accounting Equation and also prepare a Balance Sheet. 1. Started business with cash amounting to Rs.35,000 and goods Rs.15, Salaries paid Rs.2, Wages Outstanding Rs Prepaid Insurance Rs Interest due but not paid Rs Rent paid in advance Rs Show the accounting equation on the basis of the following transactions 1. Started business with Cash Rs.60, Rent received Rs.2, Accrued Interest Rs Commission received in advance Rs.1, Mr.Pai started a business with a cash investment of Rs.21,00,000.The following business transactions have been recorded: 1. Paid three months advance rent for office accommodation Rs.2, Bought Car for Office Rs.12,00, Purchased furniture Rs.42, Bought Computer from Computer Visions Rs.25, Sold furniture at cost to Peter for Rs.21, Peter paid Rs.15,000 in Cash and accepted a bill at three months for the balance. 7. Paid telephone bill Rs.2,500 and electricity bill of Rs.4, P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

6 8. Peter paid the amount of the bill due on maturity. 9. Collected Rs.3,500 as Commission and Commission received in advance Rs.2, Purchased goods for Rs.11,250 at a trade discount of 10%. 29 Amit had the following transactions. Use accounting equation to show the effect on his assets liabilities and Capital. 1. Commenced business with Cash Rs.12,50, Purchased securities for Rs.15,000 in cash. 3. Purchased goods for 1,00,000 at a trade discount of 10% and cash discount of 5% from Mahek. Paid the cash on the same day and availed the cash discount. 4. Sold goods costing Rs.1000 for 1, Received dividend on securities Rs Goods lost by fire Rs Purchased goods for cash Rs.12,000 and on credit Rs.15, Mr.White sold goods to us Rs.23, Settled White s account by paying Rs.23, Mr.Black purchased goods from us Rs. 10,000 and accepted a bill of exchange. 11. Settled the Creditors account by paying 14, Show the Accounting equation on the basis of the following transactions and prepare a Balance Sheet. 1. Shyam commenced business with cash Rs.35,00,000; Goods Rs.80,000; Furniture Rs.2,00, Sold goods costing Rs.24,000 for cash to Ramesh Rs.26, Commission received in advance Rs.2, Depreciation on furniture Rs Deposited in the bank Rs.2,50, Purchased household goods for Rs.15,000 giving Rs.5,000 in cash and balance through a loan. 7. Paid Rs.7500 for loan and Rs.250 as interest. 8. Accrued interest Rs Goods destroyed by fire (Cost Rs.500, Sale price Rs.600) 10. Withdrew Rs.550 for personal use. 31 Show the accounting equation on the basis of the following transactions: 1) Shri Ganesh commenced business with cash Rs.35,000, goods Rs.8,000 and furniture Rs.7,000. 2) Bought furniture from M/s Mohan Furnitures on credit for Rs.3,000. 3) Purchased goods from Sohan for cash Rs.35,000. 4) Sold goods to Shyam for cash Rs.40,000(costing Rs.30,000). 5) Bought goods from Ramesh Rs.30,000. 6) Sold goods to Shyam costing Rs.30,000 for Rs.50,000. 7) Received Rs.49,500 from Shyam in full settlement. 8) Paid Rs.29,700 to Ramesh in full settlement. 9) Paid half the amount owed to M/s Mohan. 10) Withdrew Rs.1,000 for personal use. 11) Withdrew goods for personal use(cost Rs.500, sale price Rs.600). 12) Purchased household goods for Rs.15,000 giving Rs.5,000 in cash and the balance through a loan. 13) Paid cash Rs.500 for loan and Rs.300 for interest. 14) Goods destroyed by fire (cost Rs.500, sale price Rs.600) 15) Paid salary Rs.500 and salary outstanding Rs ) Paid rent in advance Rs.2, ) Accrued interest Rs P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

7 18) Commission received in advance Rs 1, ) Charged depreciation of Rs 400 on furniture. 32 Give an example for each of the following types of transactions: a) Increase in one asset, decrease in another asset. b) Increase in asset, increase in liability. c) Increase in asset, increase in owner s capital. d) Decrease in asset, decrease in liability. e) Decrease in asset, decrease in owner s capital. f) Increase in one liability, decrease in another liability. g) Increase in liability, decrease in owner s capital. h) Decrease in liability, increase in owner s capital. 33 Mr. X commenced his business on 1st April, 2008 by introducing capital of Rs. 50,000. During the year, following transactions had taken place Amount Rs. (a) Bought Machine for cash. 20,000 (b) Purchased goods for 24,000 (c) Sold goods (costing Rs. 9,500) to Om for cash. 20,000 (d) Purchased goods from Azhar. 14,000 (e) Introduced additional capital. 16,000 (f) Commission received in advance. 2,000 (g) Paid to Creditors Rs. 10,500 in full settlement. (h) Bought Computer for his personal use. 10,000 (i) Rent paid for the year. 10,000 (j) Payment for stationery 400 (k) Sold goods (costing Rs 12,000) for Rs.16,000. Out of which Rs. 2,000 received in cash. Show the above transactions in accounting equations. *********************** 7 P a g e C l a s s 1 1 A c c o u n t a n c y C h a p t e r

Padasalai s Creative Questions Team UNIT-3

Padasalai s Creative Questions Team CLASS XI UNIT-3 ACCOUNTANCY 1. Which one of the following equation is correct? a) Owner s Equity = Liability + Asset b) Owner s Equity = Asset Liability c) Liability