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Unit 4: Accounting Equation and Accounting Cycle

7. Show the accounting equation on the basis of the following transactions Notes
(i) Manu started business
Cash 600000
Goods 100000

(ii) Purchased office machine for cash 90000
(iii) Sold goods (costing 60000) for credit to Asha
(iv) Purchased building for cash 130000
(v) Cash received from Ashu 80000

(vi) Purchased goods on credit to M/s Ashok Trader for cash 70000
(vii) Salaries paid 6000
(viii) Insurance prepaid 10000
(ix) Cash paid to M/s Ashok traders in full settlement 68000

Answers: Self Assessment

1. double-entry bookkeeping 2. Balance sheet

3. Owner’s equity 4. Balance Sheet
5. Assets 6. Accounting
7. Assets Accounts

4.6 Further Readings

Books Khan and Jain, “Management Accounting”.

M.P. Pandikumar, “Accounting & Finance for Managers”, Excel Books, New Delhi.
R.L. Gupta and Radhaswamy, “Advanced Accountancy”.
S.N. Maheswari, “Management Accounting”.
V.K. Goyal, “Financial Accounting”, Excel Books, New Delhi.

Online link www.futureaccountant.com

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