Answer to Question #232830 in Accounting for Shan

Question

Use the basic accounting equation to analyse and record the transactions of a and son's in the correct format of accounting equation.
A contributed her car worth 500 for business purposes
Weekly wages made in cash r400
A withdrew 2000 from business account for personal use
Trading inventory was bought on wholesaler credit R500
Goods were sold on credit 2000
Paid wholesaler 2000

Answer 1

Solution:

Accounting equation: Assets = Liabilities + Owner’s Equity

Assets                                      = Liabilities                      +                Owners Equity

+500 MV                                  =                                                           +500 Capital contributed

-400 Cash                                 =                                                            -400 Wages

-2000 Cash                               =                                                            -2000 Drawings

+500 Inventory                         = +500 Creditor

+2000 Accounts Receivable   =                                                           +2000 revenue

-2000 Cash                               = -2000 Creditor