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.

Krishna has invested a capital of Rs. 80,000 on June 30, 1987. He purchased goods from Suresh on credit, amounting to Rs. 20,000. Find out the value of assets.

Answer

We know that Capital+ Liabilities = Assets

Capital = Rs. 80,000

Liabilities = Credits = Rs. 20,000

So, by the formula: Rs. 80,000 + Rs. 20,000 = Assets

Assets= Rs. 1,00,000