Answer to Question #311465 in Finance for Aditya

Question

1.     Analyze the following transaction for Surprise Ltd. Using the concept of Accounting Equation comprising of Assets, Liabilities and Equity.

1.     Commenced business with cash of Rs. 5,00,000.

2.     Purchased equipment for cash Rs. 2,00,000.

3.     Purchased furniture worth Rs. 50,000 on credit from IndiMart.

4.     Purchased raw materials for Rs 25,000 against cash from XYZ Suppliers.

5.     Deposited cash of Rs. 1,25,000 in the current account.

Solid goods for Rs. 75,000 and received a cheque against the same.

Kindly Give detail answer concept of Accounting Equation and below transaction with format

Answer 1

1.Debit cash register credit settlements with founders - 5 000 000

Increase in capital and assets

2.Debit equipment credit cash register - 2 000 000

Increase in long-term assets and decrease in short-term assets

3.Debit furniture loan settlements on loans and borrowings - 50 000

Increase in assets and increase in liabilities

4.Debit materials credit cash register - 25000

Increase in assets and increase in liabilities

5.Debit current account credit  cash register - 125000

Increase in assets and decrease assets

Debit goods credit checking account - 75 000

Increase in assets and decrease assets