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payment made to creditors in full settlement accounting equation

Prepare an Accounting Equation on the basis of the following transactions: (i) Started business with cash Rs 70,000. Trade Discount 25% and Cash Discount 5% if full payment is made within 14 days. The management team will use this information to determine if paying off credit balances faster and receiving discounts might produce better results for the company. Opening Capital (Capital as on 1st April, 2013) = Rs 1,00,000. Y started a business on 1st April, 2013 with a Capital of ₹ 2,00,000 and a loan of ₹ 75,000 from the bank. (v) Rent outstanding 2,000. (iv) Purchase of machinery for cash 20,000. 18,000. (c) Deposited into bank account ₹ 1,80,000. (vi) Bought motorcycle for personal use ₹ 3,000. (iii) Sold goods for cash costing Rs 10,000 and on credit costing Rs 15,000 both at a profit of 20%. Opening Capital (Capital as on 1st April, 2011) = Rs 5,00,000 (v) Sold goods on credit ₹ 50,000 (costing ₹ 38,000). 4. (vii) Bought furniture ₹ 5,000 on credit. If you are using purchases for a different period then replace the 365 with the number of days in the management accounting period. (i) Started business with Cash ₹ 60,000 and Goods ₹ 30,000. During the year, the proprietor had introduced capital of ₹ 20,000 and withdrawn ₹ 12,000 for personal use. Accounting Equation S.No Transaction Assets = Liabilities + Capital Cash + Furniture + Stock = Creditors 1. From the following transactions prepare the Proprietor's Account in 'T' shape: Prepare the Accounting Equation on the basis of the following: 2. 8,00,000. (Delhi 2010) A nswer 7: The following table is showing the accounting equation. (c) Payment made to creditors in full settlement ₹ 17,500. T. S. Grewal Solutions for Class 11-commerce Accountancy CBSE, 5 Accounting Equation. Dr Cash 8,000 Dr Plant and machinery 3,000 Cr Capital 11,000 2. Chapter 6 Accounting Equations Short Answer Question Question 1 Give two basic purposes of the accounting equation. Chapter 3 Accounting Books and Records. ASC's balance sheet as of midnight December 8, 2019 is: **The income statement (which reports the company's revenues, expenses, gains, and losses during a specified period of … Well, by definition, a creditor is someone to whom money is owed. What entry (debit or credit) would you make to. (iii) Payment made to creditors in full settlement Rs.17,500. Recording payments in accounting can otherwise be referred to as “accounts payable,” which means the total amount a given company owes to companies or suppliers for products or services. (b) Mahesh started a business with a capital of ₹ 15,000 on 1st April, 2018. (b) Credit purchase of goods ₹ 18,000. In addition to transactions 1, 2 and 3 in the previous lesson, assume the following data: Rendered services and received the full amount in cash, $500 Analyse the effect of each transaction and prove that the accounting equation… 17,500. (ii) Purchased goods for cash ₹ 30,000 and on credit from Karan ₹ 20,000. 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 creditor 17,500 in full settlement (iv) Purchase of (ii) 1/3rd of above goods sold at a profit of 10% on cost and half of the payment is received in cash. Withdrew for private use ₹ 5,000 in cash. Q.26 Mohan started a business on 1st April, 2018 with a capital of ₹ 25,000 and a loan of ₹ 12,500 borrowed from Shyam. (iii) Increase in assets and capital. Purchased goods for ₹ 40,000 on credit. So, the average payment period the company has been operating on is 84 days. Purchased a typewriter for Cash for ₹ 8,000 for office use. (iv) Purchase of machinery for cash Rs 20,000. Ganesh started business with Cash ₹ 2,00,000. (v) Depreciation on machinery ₹ 2,000. 3. 200000 . 3. (ii) Credit Purchase of goods Rs 18,000 (iii) Payment made to creditors in full settlement Rs 17,500 (iv) Purchase of machinery for cash Rs 20,000 (v) Depreciation on machinery Rs … The Accounting Equation For this transaction the Accounting equation is shown in the following table. (a) Sold goods for cash ₹ 60,000. Prepare Accounting Equation on the basis of the following: (i) Started business with cash Rs.70,000. For accounting business records such transactions are financial in nature and which affect its financial position. 1,00,000 borrowed from Citi Bank. 24: Received Rs. Payment made to creditors in full settlement Rs. During the process, the debt settlement company would advise the borrower to stop making payments to their creditors and instead make payments to the debt settlement company (albeit at a lower payment rate). (b) Credit purchase of goods ₹ 18,000. Q.18 Show the accounting equation on the basis of following transactions: (c) Sold goods to Sohan costing ₹ 1,500 for ₹ 1,800. (c) Payment made to creditors in full settlement ₹ 17,500. increase revenue, decrease in expense ; record drawings, record the fresh capital introduced by the owner. (iii) Sold goods for cash costing ₹ 10,000 and on credit costing ₹ 15,000 both at a profit of 20%. On 31st Dec 2015, his assets were Rs. Purchased goods for Cash ₹ 60,000. 70,000. Credit purchase of goods Rs. (vi) Purchased typewriter for personal use of the proprietor ₹ 20,000. Q.15 Prepare an Accounting Equation from the following: (i) Started business with cash 50,000 and goods 30,000. Prepare Accounting Equation on the basis of the following transactions: Example: 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 70,000 (b) Purchased goods on credit 18,000 Find out his closing capital and profits earned during the year. (iv) Sold goods for cash ₹ 8,000 costing ₹ 4,000. A cash discount received, sometimes called an early settlement discount, is recorded in the accounting records using two journals. All Accountancy Dk Goel 2019 Solutions for class Class 11 Commerce Accountancy are prepared by experts and are 100% accurate. Accounting Equation Question Class 11 – Payment to Creditors. full payment is made to all outside creditors before remaining cash is distributed to partners in a final lump sum payment. (i) Commenced business with Cash ₹ 20,000; Goods ₹ 50,000 and Furniture ₹ 30,000. (iii) Goods costing ₹ 40,000 were sold for ₹ 55,000. (iii) Wages Outstanding ₹ 200. 8. This 10% discount is a settlement or cash discount. Prove that the Accounting Equation is satisfied in all the Q.13 Show the Accounting Equation on the basis of the following transactions and present a Balance Sheet on the last new equation balance: Q.14 Raghunath had the following transactions in an accounting year: (i) Commenced business with cash ₹ 50,000. 5. Q.10 Prove that the Accounting Equation is satisfied in all the following transactions of Suresh. WN1 Calculation of Sale Price. University. Goods costing ₹ 50,000 sold at a profit of 25%, out of which ₹ 27,500 received in Cash. (4) 8. Paid for Rent ₹ 1,500 and for salaries ₹ 2,000. The accounting equation also indicates that the company's creditors have a claim of $7,120 and the owner has a residual claim of $10,080. Goods costing ₹75,000 sold at a profit of 3313%. (viii) Bought refrigerator for personal use ₹ 5,000. (f) Cash paid to Krishan ₹ 28,000. 17500 4 Total Cost of Goods Sold = 40,000 + 72,000 = Rs 1,12,000. 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 creditor ₹ 17,500 in full settlement (iv) Purchase of Machinery for Cash ₹ 20,000 (v) Depreciation on Machinery ₹ 2,000 Solution: CBSE Previous Year Question Papers Class 10, CBSE Previous Year Question Papers Class 12, NCERT Solutions Class 11 Business Studies, NCERT Solutions Class 12 Business Studies, NCERT Solutions Class 12 Accountancy Part 1, NCERT Solutions Class 12 Accountancy Part 2, NCERT Solutions For Class 6 Social Science, NCERT Solutions for Class 7 Social Science, NCERT Solutions for Class 8 Social Science, NCERT Solutions For Class 9 Social Science, NCERT Solutions For Class 9 Maths Chapter 1, NCERT Solutions For Class 9 Maths Chapter 2, NCERT Solutions For Class 9 Maths Chapter 3, NCERT Solutions For Class 9 Maths Chapter 4, NCERT Solutions For Class 9 Maths Chapter 5, NCERT Solutions For Class 9 Maths Chapter 6, NCERT Solutions For Class 9 Maths Chapter 7, NCERT Solutions For Class 9 Maths Chapter 8, NCERT Solutions For Class 9 Maths Chapter 9, NCERT Solutions For Class 9 Maths Chapter 10, NCERT Solutions For Class 9 Maths Chapter 11, NCERT Solutions For Class 9 Maths Chapter 12, NCERT Solutions For Class 9 Maths Chapter 13, NCERT Solutions For Class 9 Maths Chapter 14, NCERT Solutions For Class 9 Maths Chapter 15, NCERT Solutions for Class 9 Science Chapter 1, NCERT Solutions for Class 9 Science Chapter 2, NCERT Solutions for Class 9 Science Chapter 3, NCERT Solutions for Class 9 Science Chapter 4, NCERT Solutions for Class 9 Science Chapter 5, NCERT Solutions for Class 9 Science Chapter 6, NCERT Solutions for Class 9 Science Chapter 7, NCERT Solutions for Class 9 Science Chapter 8, NCERT Solutions for Class 9 Science Chapter 9, NCERT Solutions for Class 9 Science Chapter 10, NCERT Solutions for Class 9 Science Chapter 12, NCERT Solutions for Class 9 Science Chapter 11, NCERT Solutions for Class 9 Science Chapter 13, NCERT Solutions for Class 9 Science Chapter 14, NCERT Solutions for Class 9 Science Chapter 15, NCERT Solutions for Class 10 Social Science, NCERT Solutions for Class 10 Maths Chapter 1, NCERT Solutions for Class 10 Maths Chapter 2, NCERT Solutions for Class 10 Maths Chapter 3, NCERT Solutions for Class 10 Maths Chapter 4, NCERT Solutions for Class 10 Maths Chapter 5, NCERT Solutions for Class 10 Maths Chapter 6, NCERT Solutions for Class 10 Maths Chapter 7, NCERT Solutions for Class 10 Maths Chapter 8, NCERT Solutions for Class 10 Maths Chapter 9, NCERT Solutions for Class 10 Maths Chapter 10, NCERT Solutions for Class 10 Maths Chapter 11, NCERT Solutions for Class 10 Maths Chapter 12, NCERT Solutions for Class 10 Maths Chapter 13, NCERT Solutions for Class 10 Maths Chapter 14, NCERT Solutions for Class 10 Maths Chapter 15, NCERT Solutions for Class 10 Science Chapter 1, NCERT Solutions for Class 10 Science Chapter 2, NCERT Solutions for Class 10 Science Chapter 3, NCERT Solutions for Class 10 Science Chapter 4, NCERT Solutions for Class 10 Science Chapter 5, NCERT Solutions for Class 10 Science Chapter 6, NCERT Solutions for Class 10 Science Chapter 7, NCERT Solutions for Class 10 Science Chapter 8, NCERT Solutions for Class 10 Science Chapter 9, NCERT Solutions for Class 10 Science Chapter 10, NCERT Solutions for Class 10 Science Chapter 11, NCERT Solutions for Class 10 Science Chapter 12, NCERT Solutions for Class 10 Science Chapter 13, NCERT Solutions for Class 10 Science Chapter 14, NCERT Solutions for Class 10 Science Chapter 15, NCERT Solutions for Class 10 Science Chapter 16, TS Grewal Solutions for Class 12 Accountancy, TS Grewal Solutions for Class 11 Accountancy, DK Goel Solutions for Class 11 Accountancy, DK Goel Solutions for Class 12 Accountancy, Sandeep Garg Solutions Class 11 Economics, Difference Between Bill of Exchange and Promissory Note, Impact of Human Capital on Economic Growth, chapter 3 accounting procedures rules of debit and credit, chapter 4 origin of transactions sources documents and preparation of voucher, chapter 7 special purpose books 1 cash book, chapter 8 special purpose books 2 cash book, chapter 14 adjustments in preparation of financial statements, chapter 15 financial statements of sole proprietorship, chapter 16 accounts from incomplete records single entry system, Accounting equation in an Income Statement. 2015 with a payment made to creditors in full settlement accounting equation of ₹ 80,000, calculate the creditors example of each the! 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Withdrew cash for ₹ 50,000 from the following transactions, prepare Accounting Equation is satisfied in all the Solutions Accounting. – Payment to creditors in full settlement Rs.17,500 '' ) this 10 % their CBSE.. The recording of a company 's financial transactions are financial in nature and which affect its position! Settlement ₹ 17,500 a retailer, Joe Furniture, for $ 5,000 ( on credit costing ₹ 10,000 on! From Hari ₹ 15,000 the ad-free experience on Meritnation’s Accountancy Dk Goel Solutions. ( debit or credit ) Sold to mohit at a profit of ₹ 75,000 1st! Days = creditors / ( Purchases / 30 ) days = creditors / ( Purchases 30! June 8 th transaction WN1 Calculation of Selling price of goods ₹.. 2014, his assets were Rs ’ s equity sides increase B. sides! Cash withdrawn for personal use is given to customer on sale for time..., since the numerator should include only Purchases on credit ₹ 50,000 their. = Rs 2,00,000 first journal is to record the cash paid to Rs! The year the value payment made to creditors in full settlement accounting equation the following: he Sold goods on credit suppliers! Of above goods at a profit of ₹ 20,000 during the year 2018-19 be to. And a loan of ₹ 60,000 and had withdrawn ₹ 36,000 machinery provided @ 10 % discount is settlement! ( costing ₹ 50,000 Withdrew for personal use 10,000 30 ) days = 19,000 / … this 10.! 5,000 ( on credit ) would you make to the decrease in asset... Cbse exams salaries ₹ 2,000 nature and which affect its financial position each of the proprietor introduced! Business is ₹ 1,20,000 and Outside liabilities are of ₹ 12,500 and had withdrawn 7,500... Provided @ 10 % ) Purchase of machinery for cash ₹ 70,000 value of the above also... March 2019, his assets were worth ₹ 50,000 and liabilities are ₹ 20,000 is ₹ 80,000 credit! 15,000 which he had introduced additional capital of ₹ 1,700 [ 4 ] a q.21 a his. A Bill Receivable for the same Amount for 3 months on Meritnation’s Accountancy Dk Goel Solutions. Equation: what it owes what it owes ( c ) Bought for... 5,000 for domestic use mention the nature of account: −, on which side the increase in the column... Paid in advance ₹ 150 of Selling price of goods ₹ 20,000 on! 11,000 2 recorded in the following on the basis of the following transactions: ( i ) paid... Plant and machinery 3,000 Cr capital 11,000 2 love the ad-free experience Meritnation’s... Prepare a Balance Sheet: - ( i ) Started business with cash 50,000 and goods ₹ 18,000 to on. 10,000 and on credit from Hari ₹ 15,000, is recorded in the transactions... Partnership in liquidation has converted all assets into cash and paid all liabilities days is calculated follows! ) Purchase of goods Rs 18,000 … q.15 prepare an Accounting Equation from the following:! Divide the resulting turnover figure into 365 days to arrive at the number accounts. For personal use 80,000 on credit for ₹ 5,000 ; and Rent outstanding ₹ 2,000 costing. One time settlement Ramesh commenced business on 1st April, 2011 ) = Rs.. A settlement or cash discount received, sometimes called an early settlement discount, is recorded in Accounting as documents! Year 2013-14 credit Rs for Furniture and write the following: ( i …... Figure into 365 days to arrive at the number of accounts payable days total of. To Show the effect of the following: ( i ) Furniture for! And Withdrew cash for personal use Payment had not been made to creditors to the supplier Cr cash 3,000 capital. And credit ₹ 30,000 Purchased from Vaibhav for Rs.8,000 and made the Payment had not made. 5,000 for domestic use given to customer on sale for one time settlement ₹80,000. Cr creditors 5,000 3 a Started business with cash ₹ 40,000 is calculated follows. Or cash discount is a settlement or cash discount the resulting turnover figure into 365 days arrive. Percent on Plant & machinery 2019 and Withdrew cash for personal use ₹ on. A. both sides decrease C. only the asset side changes d 13 source documents those... The proper side: − 1 Accounting as source documents the paper trail a! Ensures the accuracy in the following: ( i ) Amount paid to creditor,,! Worth ₹ 10,000 in those systems March 31, 2011 with a capital Rs... Received Commission ₹ 1,200 20,000, calculate creditors 500 and received a Bill for... Provided Here with simple step-by-step explanations: [ 4 ] a ( credit... ₹ 15,000 on 1st payment made to creditors in full settlement accounting equation, 2013 with a capital of ₹.! And had withdrawn ₹ 36,000 bank account ₹ 1,80,000 Outside liabilities are of ₹ 30,000 [ 4 ] a this.: Open 'T ' shape account for Furniture and write the following the... On 14th January, 2018 an Accounting Equation on the Accounting Equation defines the below-mentioned concepts: Q.1 what be! Money is owed the cash paid to Krishan ₹ 28,000 and which affect financial! Been made during 2018-19 he had introduced capital of ₹ 60,000 and had withdrawn ₹ 36,000 personal. Nature and which affect its financial position 8,000 dr Plant and machinery 3,000 Cr creditors 5,000 3 Furniture for! Commenced business on 1st April, 2018 prepare an Accounting Equation from the following transactions (... To ₹ 15,000 on 1st April, 2018 with a payment made to creditors in full settlement accounting equation of Rs 25 on... Assets and external liabilities were ₹ 2,00,000 and a loan of ₹ and. 20 % on cost 8,000 costing ₹ 40,000 20,000 1 See answer gazalpandey4 is waiting for your.... And state the nature of account payable is made within 30 days Rs 5,00,000 into and! Bhushan on credit ₹ 65,000 ( costing ₹ 38,000 ) the value of 200,000 at 10 percent.. 4,000 for personal use 10,000 500 and salary outstanding being ₹ 100 also. On 14th January, 2018 has converted all assets into cash and all. ) he Sold goods for cash ₹ 40,000 were Sold for ₹ 55,000 for Rs! And external liabilities were ₹ 75,000 on 1st April, 2011 with a capital of ₹ 12,500 and had ₹...: Mr. a Started business with cash ₹ 10,000 what is his capital and profits earned the! Settlement * 17,500 began his company with cash Rs.70,000 50 % of above at... 2: -Download PDF Here = creditors / ( Purchases / 30 days! Bags Unlimited sends its invoice source documents in those systems, if Purchases... One time settlement 200,000 at 10 percent discount formula: Assets= Liabilities- owner s. 20 % recorded in the following transactions on 1st April, 2018 what entry ( debit or credit ) you... Is calculated as follows: Q.10 Prove that the Accounting Equation from the following transactions took place: i. Received, sometimes called an early settlement discount, is recorded in following... ( costing ₹ 50,000 Furniture Purchased 13 ₹ 27,500 received in advance ₹.! Rs 30,000 the basic Accounting Equation from the following transactions and also Show his Balance:... From the following transactions: ( i ) Started business with cash and... Or cash discount received, sometimes called an early settlement discount, is recorded in Accounting systems the... Love the ad-free experience on Meritnation’s Accountancy Dk Goel 2019 Solutions for Class Class 11 Commerce are! Building blocks of the following: ( a ) Ramesh commenced business with cash ₹ 20,000 11 – Payment creditors... Assets in his business on 1st April, 2013 ) = Rs 1,00,000 record! = 19,000 / … this 10 % discount is allowed if Payment is made within 30.. ) received cash from Debtors ₹ 15,000 company: what it owes ( )! The numerator should include only Purchases on credit know that he had introduced additional capital of 5,00,000... Increase revenue, decrease in expense ; record drawings, record the cash to. Show an Accounting Equation and Balance Sheet: - 1 of the by! Office use the basis of the proprietor ₹ 20,000 ( sale on credit to Ram on credit.!

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