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Accounting Problems And Solutions / Exercises And Solutions Record the Accounting Entries for the below given transactions (Just Pass Entries With Amount And Narration / Explanation). What types of accounts are involved in the business transactions. State with reasons why we debit an account and credit an account 1. 1st July, 2021: Mr. A started business as a a Sole Proprietorship with cash Rs. 500000. 2. 2nd July, 2021: He Purchased Goods worth Rs. 100000 from vendor on account. 3. 18th July, 2021: He sold merchandise / goods worth Rs. 150000 to customer, Mr. B on account. 4. 21st July, 2021: He sold merchandise for Cash Rs. 30000 to customer, Mr. C. 5. 23 July, 2021: He withdrew cash of Rs. 8000 from the business for his own personal use. Solution: The following journal entries are recorded in the Book of Accounts of Mr. A's business: 1.                                         ...

What Does A Balance Sheet Prove? A Balance Sheet proves that debits are equal to credits is false / wrong as it proves Assets are equal to Liabilities and Owner’s Equity ( Accounting Equation ) at a specified time on a particular date. However, A Trial Balance proves that debits and credits are equal in the Ledger’s Accounts . Mathematically, we can write as shown below: Assets = Liabilities + Owner’s Equity Example: Cash Received From Sales Effect On Accounting Equation Mr. A Sold Merchandise Worth For Cash Rs. 10000 on 28 th June, 2022. Prove that Assets = Liabilities + Owner’s Equity. As we know that the accounting equation shows:                                 Assets    =      Liabilities      +     Owner’s Equity                                +Cas...

Accounting is a language of b usi ness as it measures financial performance and financial position and interprets t h e results of t he b usi ness t hrough various Financial Statements .   Here are the 3 Defi nitio ns of Accounting (Definitions Of Accounting By Different Scholars & Authors And Institutions) 1. According To American Institute of Certified Pub lic Accou ntants Committee on Terminology (AICAT) “Accounting is t he art of recordi ng, classifying and summarizing, in a significant manner and in terms of money, transactions and events, w hich are, i n part at least, of a financial c haracter, a nd interpreting t he results thereof”.   2. Moder n Definition of Accounting   According to American Accounting Association (AAA) “Accou nting is t he process of ide ntifying, measuring and commu nicating economic information to permit informed judgements and decisions b y users of i nformation ” 3. Accounting Definition B y Different Authors ...