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Question
‘Cash withdrawn by the proprietor from the business for his personal use’ causes ____________.
Options
Decrease in assets and decrease in owner’s capital
Increase in one asset and decrease in another asset
Increase in one asset and increase in liabilities
Increase in asset and decrease in capital
Solution
‘Cash withdrawn by the proprietor from the business for his personal use’ causes Decrease in assets and decrease in owner’s capital.
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RELATED QUESTIONS
Accounting equation signifies ___________.
The incorrect accounting equation is _____________.
Real account deals with ____________.
Which one of the following is representative personal account?
What is the accounting equation?
How are personal accounts classified?
Write a brief note on accounting equation approach of recording transactions.
What are the three different types of personal accounts?
What will be the effect of the following on the accounting equation?
- Sunil started business with ₹ 1,40,000 cash and goods worth ₹ 60,000
- Purchased furniture worth ₹ 20,000 by cash
- Depreciation on furniture ₹ 800
- Deposited into bank ₹ 40,000
- Paid electricity charges through net banking ₹ 500
- Sold goods to Ravi costing ₹ 10,000 for ₹ 15,000
- Goods returned by Ravi ₹ 7,500 (costing ₹ 5,000)
Create an accounting equation on the basis of the following transactions:
- Started business with cash ₹ 80,000 and goods ₹ 75,000
- Sold goods to Shanmugam on credit for ₹ 50,000
- Received cash from Shanmugam in full settlement ₹ 49,000
- Salary outstanding ₹ 3,000
- Goods costing ₹ 1,000 given as charity
- Insurance premium paid ₹ 3000
- Out of insurance premium paid, prepaid is ₹ 500
