PRACTICAL PROBLEMS

Accounting Equation
1. Prepare accounting equations on the basis of the following:
(i) Anurag started business with cash 2,50,000.
(ii) Borrowed cash 40,000 from bank.
(iii) Telephone bills paid in cash 3,000.
(iv) Anurag paid school fees of his son from the business 15,000.
(v) Repaid bank loan 30,000. /
(vi) Purchased goods for cash 22,000.
(vii) Repaid the balance of bank loan by borrowing equal amount from Jodhan.
(viii) Provide interest on capital 5,000.
2. Prepare accounting equations on the basis of the following:
(1) Rahim started business with cash 2,00,000.
(ii) Furniture purchased for Cash * 20,000.
(iii) Rent paid in cash 2,000.
(iv) Purchased goods on credit * 30,000.
(v) Sold goods (cost price 20,000) for 25,000 in cash.
3. Prove that the accounting equation is satisfied in all the following transactions of Suresh and
prepare balance sheet at the end
(i) Commenced business with cash 80,000 and bank balance 40,000.
(ii) Cash withdrawn from bank for office use 15,000.
(iii) Internet bill paid in cash 9,000.
(iv) Commission received by cheque 21,000.
(v) Cash withdrawn from bank for personal use 11,000.
(vi) Additional capital introduced 24,000.
(vii) Charged interest on drawings 2,000.
4. Show the effect of following transactions on the accounting equations and prepare balance sheet at
the end :
(i) Surveen commenced business with cash 60,000 and stock 30,000.
(ii) Purchased goods for cash 30,00 and on credit 15,000.
(iii) Sold goods (costing 16,000) for 14,000 in cash.
(iv) Sold goods (costing 12,000) for 15,000 on credit.
(v) Goods donated for Leh Ladakh residents 7,000.
(vi) Goods withdrawn by Surveen for personal use 79,500.
5. Show the effect of following transactions on the accounting equations:
(i) Imran commenced business with cash 1,20,000.
(ii) Purchased goods on credit 20,000.
(iii) Purchased machinery for 18,000.
(iv) Sold goods (costing 11,000) for 13,000.
(v) Sold machinery (costing 15,000) for 14,500.
(vi) Cash paid to creditors 17,000.
6. Arvind has the following transactions. Use accounting equations to show their effect on his assets,
liabilities and capital:
(i) Commenced business with cash 90,000 and bank balance 40,000.
(ii) Travelling expenses paid by cheque 7,500
(iii) Salary due but not paid 7 5,500
(iv) Rent paid for next year by cheque 6,000
(v) Interest received 12,000
(vi) Interest due but not received 8,000
(vii) Commission received in advance for next year 9,000
7. Show the effect of following transactions on the accounting equations :
(i) Bhupinder commenced business with cash 65,000 and stock 35,000.
(ii) Purchased goods on credit 14,000.
(iii) Sold goods (costing 15,500) for 12,500 on credit.
(iv) Returned goods to supplier 4,000.
(v) Cash paid to supplier 5,500.
(vi) Goods returned by a customer
(vii) Cash received from a customer 4,500.
8. Show the accounting equations on the basis of the following transactions:
(1) Archna started business with cash 50,000, stock 25,000 and furniture 15,000.
(ii) Goods costing 13,000 sold for 16,000 on credit.
(iii) Purchased goods on credit * 35,000.
(iv) Depreciate furniture by 2,000.
(v) Bad debts written off 4,500.
(vi) Cash received 6,400 from customer and allowed him discount 100.
(vii) Bad debts recovered 2,500.
(viii) Cash paid to creditor 14,600 and discount received 400.
9. Show the accounting equations on the basis of the following transactions and present a balance
sheet :
(i) Mohan commenced business with 70,000
(ii) Purchased goods on credit 14,000
(iii) Withdrew for private use 1,700
(iv) Purchased goods for cash 10,000
(v) Paid wages 300
(vi) Paid to creditors 10,000
(vii) Sold goods costing 12,000 on credit 15,000
(viii) Sold goods for cash (cost price 3,000) 4,000
10. Show the accounting equations on the basis of the following transactions :
(1) Priyanka started business with cash 80,000 and bank balance 70,000.
(ii) Paid three months rent in advance for office accommodation 30,000
(iii) Salaries paid by cheque 11,000 and salary outstanding 6,000.
(iv) Purchased goods for 45,000 from Dinesh, out of which 2/3rd payment made immediately by cheque.
(v) Cash paid 14,400 to Dinesh in full settlement of his account.
(vi) Purchase household furniture for 25,000, giving 10,000 in cash and balance through a loan on
personal account.
(vii) Goods distributed as free sample 4,000.
11. Show the accounting equations on the basis of the following transactions:
(1) Mukesh started business with cash 80,000.
(ii) Purchased goods from Ravi 20,000.
(iii) Goods costing 10,000 sold to Ramesh for 15,000.
(iv) Withdrew 4,000 for personal expenses.
(v) Paid to creditors 12,500.
(vi) Received from debtors 6,000 and discount allowed 500.
(vii) Received commission 2,500.
12. Supriya had the following transactions. Use accounting equations to show their effect on his assets,
liabilities and capital.
(a) Brought 45,000 in cash to start business.
(b) Purchased shares for cash 22,500.
(c) Purchased an office equipment for 45,000, giving 15,000 in cash and the balance through a loan.
(d) Sold shares costing 3,000 for 4,500.
(e) Purchased one printer for 8,400 in cash.
 (f) Received cash for rent 10,800.
(g) Paid cash 10,000 for loan and 900 for interest.
(h) Received cash for property let out * 600.

13. Give accounting equations for the following transactions of Hitesh for the year 2022-23:
(a) Started business with cash 18,000.
(b) Paid rent in advance 400.
(c) Purchased goods for cash 5,000 and on credit 2,000.
(d) Sold goods for cash 4,000 (costing * 2,400).
(e)Rent paid 1,000 and rent outstanding 200.
(f) Bought motor cycle for personal use 8,000.
(g) Purchased equipment for cash 500.
(h) Paid to creditors 600.
(i) Depreciation on equipment 25.
14. Show the accounting equations from the following transactions:
(i) Tina commenced business with cash 50,000.
(ii) Purchased goods for cash 20,000 and on credit 30,000.
iii) Sold goods for cash 40,000 (costing 30,000).
(iv) Rent paid 5,000.
(v) Bought furniture 15,000 on credit.
(vi) Bought refrigerator for personal uso 4,000.
(vii) Purchased building for cash 20,000.
(viii) Wages outstanding 2,000.
15. Show the effect of following transactions on accounting equations:
(1) George started business with cash 45,000 and bank balance 35,000.
(ii) Purchased goods for cash 20,000 and on credit 10,000.
(iii) Sold half of the total above goods purchased at a profit of 20% on cost.
(iv) Dividend received from Tata Tea co. 4,000 by bank draft.
(v) Advance received from a customer 5,000 by cheque.
(vi) Goods destroyed by fire 12,000. Insurance company admitted the claim for 9,000.
16. Show the effect of following transactions on accounting equations:
(i) Samuel commenced business with cash 60,000 and furniture 30,000.
(ii) Purchased goods on credit from Manisha 45,000.
(iii) Sold 2/3rd of above goods at a profit of 25% on sales. Half the payment received
immediately.
(iv) 1/3rd of the amount due to Manisha was paid after deducting 4 % cash discount.
(v) Accepted a bill drawn by Manisha 20,000.
(vi) Depreciate furniture by 10%.
17. Show the effect of following transactions on accounting equations:
(i) Divedi started business with cash 40,000.
(ii) Lent 10,000 to Trivedi.
(iii) Interest received from Trivedi 400.
(iv) Borrowed 25,000 from Charturvedi.
(v) Interest paid to Chaturvedi 1,000.
(vi) Interest given to Divedi 1,500.
18. Show the effect of following transactions on accounting equations;
(i) Sukhbir started business with bank balance 70,000
(ii) Taxes collected from the customers 15,000
(iii) Bank charges 1,000
(iv) Collected taxes deposited with the Government 12,000
(v) Income tax paid by cheque 9,000
(vi) Life insurance premium paid in cash 2,000