Unit-3 Basic Accounting Terms and Concepts

This unit explains some of the terms which are commonly used in accounting and also the basic concepts underlying the accounting system.

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Mr. Rakesh started Rakesh Trading Company with a capital of Rs. 30,000. The company also borrowed Rs. 10,000 from the State Bank of India. The firm purchased a delivery van for Rs. 20,000, furniture for Rs. 5,000, typewriter for Rs. 6,000, account books and other stationery for Rs. 500. It has purchased goods on credit from M/s Gumcharan Singh & Co., for Rs. 4,000, and from M/s Lalwani Traders for Rs. 3,000. It has sold goods for cash to Mr. Peter for Rs. 2,000 and Mr. Ali for Rs. 4,000. It has also paid Rs. 300 for electricity charges, Rs. 1,000 for salaries, and Rs. 500 for rent. From the above information, list out the assets, liabilities, incomes and expenses. 

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Learning Pundits Content Team

Written on Apr 17, 2019 3:31:57 PM

Assets : Delivery van, furniture, typewriter, cash on hand, stock of goods not yet sold.

Liabilities : Bank load, M/s. Gurucharan Singh & Co., M/s. Lalwani Traders.

Income : Amounts received from Mr. Peter and Mr. Ali.

Expenses : Account books and stationery, electricity charges, salaries and rent.