Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

A business had the accounting equation shown below. assets $48\,000 = liabilities $7\,000 + capital $41\,000 The bank balance included in the assets was $1000. These transactions then took place. 1 The owner withdrew drawings of $2000 by cheque. 2 Goods intended for resale were bought on credit; the list price was $4000 less 25% trade discount. What would the accounting equation be after these transactions?

  • Aassets $49\,000 = liabilities $10\,000 + capital $39\,000
  • Bassets $50\,000 = liabilities $10\,000 + capital $40\,000
  • Cassets $50\,000 = liabilities $11\,000 + capital $39\,000
  • Dassets $51\,000 = liabilities $11\,000 + capital $40\,000

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