# 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.

# The following is the assets and liabilities position of Srinivasa Traders on October 1, 1987: Assets:  Cash Balance Rs. 3,000; Furniture Rs. 5,000; Building Rs. 50,000; Debtors Rs. 22,000.Liabilities:  Bank Loan Rs. 10,000; Creditors Rs. 15,000. Find out the amount of capital on that date.

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## Learning Pundits Content TeamWritten on Apr 17, 2019 3:11:17 PM

We know that Capital+ Liabilities = Assets

Sum of Assets = Rs.3000 + Rs.5000 + Rs.50,000 +Rs.22,000

= Rs.80,000

Sum of liabilities = Rs.10,000 + Rs.15,000

= Rs. 25,000

So, by formula : Capital + Rs.25,000 = Rs.80,000

Capital= Rs.80,000 – Rs.25,000 = Rs.55,000

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