From the following particulars of mr atif prepare the...

From the following particulars of Mr. Atif, prepare the accounting equation: a) Started business with cash for Rs. 450,000 and Building Rs. 2,000,000. b) Paid into bank Rs. 200,000. c) Purchased furniture for cash Rs. 40,000. d) Purchased goods for cash Rs. 200,000. e) Sold goods (costing Rs. 3,000) for cash Rs. 3,400. f) Expenses outstanding worth Rs. 2,000. g) Received securities deposit from tenants Rs. 5,500. h) Sold goods to Mohan (costing Rs. 20,000) for Rs. 10,000. i) Paid telephone expenses Rs. 19,100.

Transcript

00:01 In this question, we are given with a list of transactions and we are asked to identify the impact on accounting equation.

00:12 The accounting equation is nothing but assets equal to liabilities plus capital.

00:23 So now we will analyze the transaction a to i and we can give the impact on the accounting equation.

00:30 So here we can make it as like this, assets equal to liabilities plus capital.

00:41 Now let us take transaction a.

00:47 Here the company is commencing business with cash and building.

00:55 So the cash for rupees 4 ,50 ,000 and building worth is 20 lakhs.

01:03 So it will increase the value of cash which is an asset and building value on the asset side and it will increase the value in capital as capital introduced to the business.

01:25 So it is increased.

01:26 B, paid to bank rupees 2 lakh.

01:38 So here the cash is paid to the bank.

01:41 So from the cash will decrease and it is paid to the bank.

01:46 Bank is also is considered as an asset.

01:48 So the value of bank will be increased.

01:51 So it will not impact the other side of the accounting equation.

01:57 Now c, purchased furniture for cash amounting rupees 2 lakh.

02:09 So here furniture is an asset.

02:12 So the asset get increased and it is purchased by using cash.

02:17 So the cash will get decreased.

02:20 The other two sides will not have any impact.