DNP Vs DES, U3 PDF

First Year B. Com. (Honours) 2024-25 Semester I Indian Knowledge System (IKS) HISTORY AND DEVELOPMENT IN ACCOUNTING Unit-III Deshi Nama Paddhati Vs Double...

First Year B. Com. (Honours) 2024-25 Semester I Indian Knowledge System (IKS) HISTORY AND DEVELOPMENT IN ACCOUNTING Unit-III Deshi Nama Paddhati Vs Double Entry Accounting System 1. INTRODUCTION Deshi Nama (Vahi Paddhati) is a very old system, derived and adopted in the Indian subcontinent, to write accounts. This system is older than double entry system. There is a good deal of similarity between the two systems, from the view point of accounting principles. Still, however because of its specific peculiarities this system shines out as against other systems. In this system the books are known as 'Vahi' and therefore this system is also known as 'Vahi Khata paddhati'. This system is written in the regional language. However, the system is very old, it is a scientific and complete method. It is very easy to write and understand the accounts by Deshi Nama System. 2. CHARACTERISTICS OF THE DESHI NAMA SYSTEM 1. Books: The books under deshi nama are hardbound and covered with red cloth. A design is made on this cover by thick string. These books are vertical and contain plain white blank sheets tied with strings. However, nowadays simple books of accounts, with lined pages are also in use. 2. Vikram Samvat: Deshi nama is usually maintained for a vikram samvat year. i.e., from Kartak sud I (ekam) to Aso vad-30 (Amaas). Now-a-days it is also kept as per income-tax rules for a financial year (From 1st April to 31st March) 3. Page for Pooja: On the first page of Rojmal or Bethomel the businessman writes the name of God; he worships and also writes a prayer to the God like "Shri Ganeshay Namah", "Shri Laxmi Matajinu Tej Hajo" etc. This page is termed as puja page. No accounting entry is recorded on this page. 4. Use of the word 'Shri': In deshi nama, while recording an entry in the Rojmel, bethomel or subsidiary books, the name of the account(khata) is preceded with the word 'Shri' e.g. if Interest (Vyaj) account is to be written, it will be written as "Shri Vyaj Khate'. Shri is considered as sign of omen. 5. Sal / Folds: The pages in each of the books of accounts are with folds (sal). Rojmel, bethomel and Khatavahi have pages with eight folds. But pages in subsidiary books have six folds. However, now in changing times, pages without folds and with columns drawn are being used. 6. Credit (Jama) and debit (Udhar) side: In the books for deshi nama system, out of total eight folds, the first four folds on the left hand side are known as jama (credit) side and the remaining four folds as udhar (debit) side. Thus, the left hand side is known as Jama side and the right hand side is known as Udhar side. 7. Methods of writing in folds/sal: In deshi nama, while recording a transaction in rojmel or bethomel on either the credit or debit side, the amount of the economic transaction is recorded in the first fold(sal) of the side. In the remaining three folds, the name of the account affected and the debit or credit to it is written. Below the name of the account, a brief detail/narration of the 1 of 12  economic transaction is given and below such brief detail/ narration, ledger folio number is written in the third or fourth fold. In deshi nama, the name of the account of the transaction is written after drawing a line. Generally, the first fold, is for the amount and the remaining three folds are for the particulars of the transaction. 8. Method of writing the amount: While entering the amount in Deshi Nama books, a sign (J) known as 'Holayo' or 'Olayo’ is put between the amount in rupees and paise. Many businessmen now a days use the sign of equality (=), instead of 'Olayo'. E.g. an amount of 121J25 or 121=25 (Rupees one hundred twenty one and twenty five paise). _____________________________ROJMEL ________________________ Jama Udhar 45=00 Shri Khate Jama 750=00 Shri Khate Udhar Dividend Received Dividend Salary Paid to 45=00 L. F. 750=00 salary Munimji L. F. Note: Folds are indicated by a line drawn for the purpose. 9. Language: Books of accounts in Deshi Nama system are written in the regional language, e.g. in Gujarat, Deshi Nama is written in Gujarati language. 10. Ink: Generally, deshi nama is written in black ink. However, blue ink is also used nowadays. 3. BOOKS OF ACCOUNTS UNDER DESHI NAMA SYSTEM (1) Rough Book : In business, transactions take place continuously during a day. It is not convenient to write the books during the day. There is possibility of forgetting to record some transactions while making the transactions of receipts and payments. At the same time, it is also not proper, if receipts and payments. i.e. Transactions are not at all recorded. Therefore, in order not to forget the transactions, small traders record their transactions of the day on a slate or loose sheets or in a diary, such record is known as tanchan or tippan. For a big businessman, the transactions are many and hence, they record them either in a diary or notebook or a book maintained for this purpose. Such a record book is termed as 'Ghadiya', 'Sudiyun' or 'Daniya'. These are the different terms used for the rough book of record. A book in use for such rough records is known as 'Adadhiya'. The businessman takes brief notes in such 'Adadhiya' as per his requirements. With the help of such a rough book, at the end of the day or at convenient time, organized accounting is done. If any transaction is forgotten to be recorded in the Rojmel or if any error has occurred, it can be traced/ verified with the help of such rough book. 2 of 12  (2) Rojmel : The way in which a journal is maintained under the Double Entry System of accounting, Rojmel is maintained in the same way under Deshi Nama. Thus, Rojmel is the basic or primary book of accounting under Deshi Nama. Cash and credit transactions are recorded in Rojmel. Closing balance derived on the basis of transactions recorded, shows cash on hand, which is termed as 'Purant Baki'. Rojmel is maintained every day. At the end of the accoutnig entries for the day, cash balance is found out. That is why, it is known as Rojmel. Ledger is prepared with the help of Rojmel. (3) Bethomel : Bethomel is another form of Rojmel. Small traders/businessmen, whose quantum of transactions is comparatively less, may maintain a complete 'Mel' at the end of a week or fortnight or month and balance is extracted. Such Mel is known as 'Bethomel' or 'Thammel'. Thus, Behtomel or Thammel is a composite or collective Rojmel for a predetermined period of days. (4) Khatavahi / Ledger : Ledger (khatavahi ) is a main book of accounts. In Khatavahi, (ledger), ledger accounts are opened and posting is done in such ledger accounts, from Rojmel, Bethomel and subsidiary books. Like Rojmel, for Khatavahi (ledger) also a book containing eight— fold pages is used. First four folds are for Jama side and other four folds are for Udhar side. Usually, one page is kept for each account, (5) Peta Nondho / Subsidiary Books : Big businessmen, whose quantum of business/ economic transactions is comparatively larger, maintain certain additional books, in addition to Rojmel which are known Peta Nondh or Peta Vahi (subsidiary books). Transactions, which are recorded in Peta Nondh are not recorded in Rojmel or Bethomel. Following Peta Nondh are used in Deshi Nama. (i) Jamaa Nondh (Purchase Book) , (ii) Udharnondh (Sales Book or Vakara nondh), (iii) Dagina Mel (Janas Vahi or Stock Register), (iv) Aankda Vahi (Sudha Vahi or Kachi Vahi) , (v) Ughrani Nondh (vi) Jangad Nondh (vii) Karar Nondh (viii) Vyaj Vahi (ix) Hundi Vahi (x) Kabala Vahi or Karar Nondh (xi) Bank vahi etc. (6) Aavro : All those transactions recorded in Rojmel or Bethomel and Subsidiary books, are again recorded in another book at the end of fifteen days or a month. Such book is called 'Aavro'. Aavro is prepared like Rojmel and for the purpose, a book that has pages with eight folds is used. After preparing Aavro at the end of a specified period, the closing balance (Pumat Baki) is arrived at. Such closing balance is tallied with the closing balance (Purant Baki) as per Rojmel or Bethomel because such balance in both the books should be the same. When posting is done after completing Aavro, it is known as Paku Namu because Namu is accumulated in one account and recorded again. It is said that "Aavro kare te bhul nahi kare" (The one who makes Aavro will not make any mistake). Aavro is useful for detecting errors and mistakes in all the transactions in the books of accounts and it is also useful as a tool of control. 'Aavro' is generally maintained by shroffs and big businessmen. 3 of 12 4. TERMS OF DESHI NAMA SYSTEM 1) Shri Bhandol Khatu : In deshi nama, capital is known as Shri Bhandol. When the owner starts a new business, as well as during the year of the business, he brings in this personal funds in the form of cash, goods, assets, receivables, they are recorded as capital in 'Shri Bandol Khate'. However, nowadays many businessmen record their capital to 'Shri Mudi (capital) khate'. In a partnership firm, the total capital of the firm is not recorded in Shri Mudi (capital) khate or Shri Bhandol Khate. For this purpose, separate individual (name wise) capital accounts of partners are maintained. E.g., Shri Kirtan Nu Mudi Khatu, Shri Shrey Nu Mudi Khatu. 2) Shri Gharkharch Khatu : In Deshi Nama, withdrawal by the owner from the firm for personal purpose is debited to 'Shri Gharkharch Khate'. Whenever the owner takes away for personal use, the goods or asset or cash, or pays from the firm for his personal expenses, it is debited to Shri Gharkahrch Khate. In a partnership firm, like capital account - separate drawing accounts for each partner is maintained. E.g. Shri Riya Nu Upad Khatu, Shri Samarth Nu Upad Khatu. Many businessmen maintain 'Shri Upad Khatu' instead of 'Shri Ghrkarch khatu'. 3) Shri Dukan Kharch Khatu : The businessman keeps such account for small and miscellaneous expenses. When the expense is incurred after a very long time or the amount of expense is very small it is debited to 'Shri Dukan Kharch'. E.g.,Wages, Cold drinks, Tea expenses, Postage expenses etc. 4) Shri Vatav Khatu : Shri Vatav Khatu in Deshi Nama has wide connotation than discount (Vatav) account under Double Entry System. Here cash discount, Allowance, Commission, loss due to fire in the business, bad debts, loss (any other ) etc. are debited to 'Shri Vatav Khate'. However, now a days businessmen maintain separate accounts for each expense or loss or profit or gain, e.g., Shri Ghalkhad (Bad Debts) khatu, Shri Commission Khatu etc. 5) Shri Vigat Khatu : When on any one particular day or in any one particular transaction, more than one accounts get debit or credit effect simultaneously, the total amount of the transaction is recorded against Shri Vigat Khate. In the sub folds below Shri Vigat Khate, the accounts which are affected are written with the amount of each such account, separately. In the ledger, each of the accounts recorded in the sub folds below 'Shri Vigat Khate' are opened and the page no. of the ledger, on which each such account is opened is recorded in Rojmel, below such affected account. "Shri Vigat khatu" is not opened in ledger because there is no account affecting Vigat Khatu. The purpose of opening Vigat khatu is to save both the time and labour, but the use of this account is very rare. 6) Shri Shah Khatu or Shri …….Khatu : During the course of the business if any transaction takes place with a person and if the name of such '*rson is forgotten, the amount of receipt or payment is recorded to 'Shri Shah Khate'. 4 of 12  In future when the name of the person is remembered, a reverse entry is passed by recording the amount to respective person's correct account and Shri Shah khatu is closed. Shri Shah khatu is also used when the name of the person is not to be disclosed. Instead of using Shri Shah khatu in the transaction it is recorded as "Shri..... khate". In such a case whenever the name of the person is remembered, his name is written in the space left after the word 'shri'. For this purpose only, some space is left blank between 'Shri' and 'Khate'. However as this is a faulty method from the view point of accounting, very less use of Shri….. khate is found. Such tradition is not acceptable from the view point of taxation. 7) Shri Tasalmat Khatu : This account is a temporary account just like as the suspense account in double entry system. During the trade when there is any receipt or payment but the name of the account is not remembered, the entry for the transaction made is recorded to Shri 'Tasalmat Khate'. When the reason for which the receipt or payment is remembered, the entry passed earlier is reversed and respective receipt or payment account is correctly recorded and Tasalmat Khatu is closed. Sometimes the name of the account to which the transaction is to be recorded but the name is not decided, it is recorded temporarily to Shri Tasalmat Khate and when the account is decided in future, correct account is debited or credited and Shri Tasalmat Khatu is closed by passing reverse entry. 8) Shri Desavar Khatu : Whenever any person of the firm - 'Munim' or the owner himself goes out of station for purchase or sale of goods or for any other business purpose, a certain amount is given to him for the use and expenses. Such amount is debited to such person's "Deshavar kahte". Afterwards when the person returns and submits the details of his transactions, with the help of such details Shri Dehsavar Khatu is credited and closed and the correct entry is recorded for each of the transactions. Thus, this a temporary account. 9) Shri Haththu Khatu : When an amount is to be paid to the creditor of the business and such amount is sent to him through some person or aangadia, such amount is debited to "Shri Haththu khate" instead of debiting it to such creditors account. Afterwards on getting the receipt from the creditor or aangadia, Shri Hathathu khatu is closed by crediting it and the creditors account is debited. Such account is a temporary one. 10) Shri Chanlla Khatu : The businessmen develop business relations during the course of business. Due to such business relations, whenever there is any good occasion at the customers or creditor's place, a gift or chanlla is to be given. Such amount is debited to "Shri Chanlla kahte". In the same way on a good occasion at his place, the businessman receives a chanlla or a gift, which is credited to 'Shri Chanlla khate', however, such tradition is now getting extinct. Now whenever chanlla or a gift is to be given it is treated as a business expense and is debited to "Shri Dukan kharch khate". 5 of 12 11) Shri Silak Vadhghat Khatu : Closing balance (silak) as per Rojmel or Bethomel should tally with the actual cash on hand. If they do not tally with the closing cash balance, efforts are made to detect the error by due verification. If the error is not detected in spite of such efforts and if the actual cash balance is more or less than balance as per Rojmel or Bethomel, the differential amount is recorded to "Shri Silak Vadhgat khate". If the actual cash balance is more than balance as per books of account, the differential amount is credited to "Shri Silak Vadhghat Khate" and if the actual cash balance is found less, it is debited to 'Shri Silak Vadhgat Khate'. In short, cash balance as per books of accounts is made equal to the actual cash balance. When the reason for such difference is traced, the reverse effect is given to "Shri silak vadhgat khate" and it is closed and correct effect is given to the concerned account. Thus the correct balance is arrives at automatically. 12) Shri Ublek Khatu : Whenever an amount is lent for a few days to a person in the business, it is debited to such person’s “Ublek Khate”. As such amount is to be received back within two to four days, its account is not opened in the ledger. For this purpose, under such ublek amount in Rojmel instead of L.F., ‘U’ is written, which indicates that the amount is not to be posted. On receiving back such ublek amount, “Shri Ublek Khatu” is credited in Rojmel, thus that account gets closed. If such amount is not received in the given time it is posted to in ledger to respective person’s account by opening his account. However, these days the tradition of recording the ublek amount in Rojmel is getting extinct. Presently most of the businessmen do not even show ublek amount in Rojmel. Such note is not acceptable from the view-point of Taxation. 13) Upartapke : When any person is lent an amount for a day or even for a shorter time, the amount so lent is not recorded as an entry in Rojmel. But in Rojmel, aftrer finding out the closing balance such amount is shown separately as a part of balance as ‘upertapke’. Assuming the amount of upartapke is in the balance, the amount of upartapke is shown separately. If the amount lent on upartapke is not received on next day, it is considered as ublek amount and recorded in Rojmel. The amount of upartapke is also known as ‘Haath Uchhini’ amount. Now the tradition of upartapke is not in practice. Traders do not even record the amount of Upartapke. 14) Kabulat and Havalo (Acceptance and Transfer) : On mutual understanding the businessmen agree to pay an amount payable to a creditor to another person, this is known as Kabulat (acceptance). In the same way, when a businessman agrees to accept an amount from another person instead of his debtor, it is also called Kabulat (acceptance). When instead of arriving at mutual understanding or kabulat about a debt or receivable an instruction or order is given, it is known as Havalo (transfer). Because of kabulat and havalo, there is an effect on the businessman’s debt and receivables. Due to such transactions the account of a person who has accepted to pay or from whom the receivable arises, is debited and the opposite party’s account is credited. E.g. Vijay accepted to pay Rs 500 to be paid by Hitesh. Here, Hitesh is a debtor whose amount now will 6 of 12  be paid by Vijay. Therefore it will be considered as the amount of Hitesh is paid off and at the same time, now it will considered as the amount due from Vijay. 15) Haste : Many times in business the receiver or payer of money may not actually be a creditor or a debtor but he may be a clerk or munimji or any other person. Therefore, for record purposes the name of the person through whom the cash is received or paid is also written. E.g., ₹ 1000 payable to Ranjana Traders is given to Munim Mayank to pay to Ranjana Trade₹ This transaction is recorded in Rojmel by debiting Ranjana Traders and in the other line “Haste Munim Mayank” is also written. Sometimes only ‘H’ is written instead of haste. 16) Miti : Vikram Sarnvat, deshi mass, and tithi are known in Deshi nama as Miti. E.g., Samvat 2071 na Chaitra Sud l. 5. DESHI NAMA PADDHATI VS DOUBLE ENTRY ACCOUNTING SYSTEM Point Deshi Nama Paddhati Double Entry Accounting (System) System 1. Origin This system is very old system This system of accounting was of accounting originated in originated in European Indian sub-continent and used countries and widely used. widely. 2. Books Hard bound vertical books, Hard bound books with line covered with red cloth and tied pages are used. with a strong thread containing blank pages are used. 3. Accounting Accounting year is generally Accounting year is as per Year Vikram Samvat year is used. Christian (English) year. 4. Original First entry for a transaction is First entry for a transaction is entry recorded in Rojmel or Bethomal. recorded in Journal. 5. Sides Under this system, left hand side Under this system, left hand is Jama (credit) side and right side is called debit side and hand side is Udhar (debit) side. right hand side is called credit side. 6. Amount Under this system, amount is Under this system, amount is either Udhar or Jama is side is either debit or credit side is recorded in first fold of the entered in the last column on respective side. the respective side. 7. Cash Under this system a separate Under this system a separate Account cash account is not prepared to cash account or cash book is record cash transactions. prepared to record cash transactions. 8. Trial Under this system, a list of Under this system, a list of balance balances of all ledger accounts balances of all ledger accounts is called ‘Utaro’. is called ‘Trial Balance’. 9. Use of term Under this system, while Under this system, the name of ‘Shri’ recording the name of an an account is not preceded by account is preceded with ‘Shri’. ‘Shri’ while recording. 7 of 12 6. DOUBLE ENTRY ACCOUNTING SYSTEM 6.1: Double Entry Bookkeeping: The recording of transactions considering the debit and credit aspect is known as a double-entry bookkeeping system. 6.2: Accounting equation: The accounting equation signifies that the assets of a business are always equal to total liabilities and capital (owners’ capital). The profit and loss will change the owners’ equity. The profit or loss represents the net difference between revenues and expenses. Therefore, the basic accounting equation can be expanded in the following manner: Assets = Liabilities + Capital Assets = Liabilities + Capital + Revenues - Expenses Where, Capital + Revenue – Expenses = Owners’ equity Assets = Liabilities + Owners’ equity Since the accounting equation depicts the fundamental relationship between components of the balance sheet, it’s also called the balance sheet equation. 6.3: Rules of Debit and Credit & Accounting equation: The basic rules of debit and credit are as follows:  Any increase on the left-hand side of the equation is a debit.  Any decrease on the left-hand side of the equation is a credit.  Any increase on the right-hand side of the equation is a credit.  Any decrease on the right-hand side of the equation is a debit. The debit and credit for different elements of the accounting equation will represent an increase or decrease in these elements as follows. Elements of the accounting equation Debit Credit Assets Increase Decrease Liabilities Decrease Increase Capital Decrease Increase Revenues Decrease Increase Expenses Increase Decrease It is clear from the table given above that debit may represent an increase in some elements while a decrease in other elements. Similarly, credit may represent an increase in some elements while a reduction of other elements. 6.4: The effect of these rules on different accounts is shown below: Debit Assets (1) Credit Increase↑(+) Decrease↓(-) Debit Liabilities (2) Credit Decrease↓(-) Increase↑(+) 8 of 12  Debit Capital (3) Credit Decrease↓(-) Increase↑(+) Debit Revenues (4) Credit Decrease↓(-) Increase↑(+) Debit Expenses (5) Credit Increase↑(+) Decrease↓(-) Debit Owners Equity (6) = [3+4+5] Credit Decrease↓(-) Increase↑(+) (Expenses, (Investment Losses, by owners, Distribution Revenues, To owners) Gains) Ex. 1: What will be the amount of equity if firm A has assets of ₹ 87,000 and liabilities ₹ 53,000. Ex. 2: On 31.3.2024, the Cofee Corners equity is twice of its liabilities. Its assets are ₹ 81,000. Find out Liabilities and Owners’ equity. Ex. 3: Let us suppose that Mr. X an individual started a business by contributing ₹ 5,00,000 and taking loan of ₹ 1,00,000 from a bank to be repayable, after 5 years. He purchased furniture costing ₹ 1,00,000, and merchandise worth ₹ 5,00,000. For purchasing the merchandise, he paid ₹ 4,00,000 to the suppliers and agreed to pay the balance after 3 months. Prepare a balance sheet. 9 of 12 Ex. 4: Develop the accounting equation from the following information available at the beginning of accounting period: Particulars Amt. ₹ Capital 1,00,000 Loan 50,000 Trade Creditors 70,000 Fixed Assets 80,000 Stock 60,000 Debtors 50,000 Cash & Bank 30,000 At the end of the accounting period the balances appear as follows: Particulars Amt. ₹ Capital ? Loan 50,000 Trade Creditors 80,000 Fixed Assets 72,000 Stock 90,000 Debtors 50,000 Cash at Bank 60,000 (a) Reset the equation and find out profit. (b) Prepare Balance Sheet at the end of the accounting period. Ex. 5: On January 1, 2024, Manohar started Quall’photo Company. The following transactions took place during the first month. Jan. 1 Manohar invested ₹ 30,000 cash in the company’s share capital (shares of ₹ 10 each). 2 Bought supplies of photographic material on credit, ₹ 9,000. 5 Bought photographic equipment for cash, ₹ 12,000. 7 Received fees for photographic services, ₹ 15,000. 13 Paid creditor for supplies, ₹ 5,000. 18 Manohar invested further ₹ 12,000 cash in the company’s share capital. 22 Billed customers for services, ₹19,000. 27 Paid office rent, ₹ 2,500, and electricity charges, ₹ 1,200. 30 Paid dividends, ₹ 4,000. 31 Prepared the monthly payroll to be paid on February 1, ₹ 11,500. Required: Analyze the effect of these transactions on the accounting equation. 10 of 12 Ans. Effect of transactions on the accounting equation: (₹) Assets = Liabilities + Equity 2023 Cash +Trade +Supplies +Equipment =Trade + Manohar’s Receivables Payables Capital Jan. 1 +30,000 +30,000 Balance 30,000 30,000 Jan. 2 +9,000 +9,000 Balance 30,000 9,000 9,000 30,000 Jan. 5 -12,000 +12,000 Balance 18,000 9,000 12,000 9,000 30,000 Jan. 7 +15,000 +15,000 Balance 33,000 9,000 12,000 9,000 45,000 Jan. 13 -5,000 -5,000 Balance 28,000 9,000 12,000 4,000 45,000 Jan. 18 +12,000 +12,000 Balance 40,000 9,000 12,000 4,000 57,000 Jan. 22 +19,000 +19,000 Balance 40,000 19,000 9,000 12,000 4,000 76,000 Jan. 27 -3,700 -3,700 Balance 36,300 19,000 9,000 12,000 4,000 72,300 Jan. 30 -4,000 -4,000 Balance 32,300 19,000 9,000 12,000 4,000 68,300 Jan. 31 +11,500 -11,500 Balance 32,300 +19,000 +9,000 +12,000 = 15,500 +56,800 Ex. 6: Show the impact of the following transactions on the accounting equation and check whether the equation remains balanced or not. 1. Umesh commences business with ₹1,00,000. 2. Purchased land for ₹24,000. 3. Constructed building at a cost of ₹25,000 paid in cash. 4. Purchased furniture for ₹5,000. 5. Purchased goods for ₹8,000 on cash. 6. Purchase goods for ₹13,000 on credit from M/S Prem traders. 7. Sold goods for cash ₹18,000 costing ₹12,600. 8. Paid salary ₹2,000 to the salesman. 9. Paid ₹7,000 to M/S Prem Traders on account. 10. Paid insurance premium on building ₹500. 11 of 12  Solution: Summary of effects of transactions on the accounting equation (₹) Assets = Liabilities + Capital Tr. No. Cash +Land +Building +Furniture +Inventory +Debtors = Creditors + Owners Equity 1 1,00,000 1,00,000 Balance 1,00,000 1,00,000 2 -24000 +24000 Balance 76,000 24,000 1,00,000 3 -25,000 25000 Balance 51,000 24000 25000 1,00,000 4 -5,000 5000 Balance 46,000 24000 25000 5000 1,00,000 5 -8,000 8000 Balance 38,000 24000 25000 5000 8000 1,00,000 6 13000 13,000 Balance 38,000 24000 25000 5000 21000 13000 1,00,000 7 18,000 -12600 +5400 Balance 56,000 24000 25000 5000 8400 13000 1,05,400 8 -2,000 -2000 Balance 54,000 24000 25000 5000 8400 13000 1,03,400 9 -7,000 -7,000 Balance 47,000 24000 25000 5000 8400 6,000 1,03,400 10 -500 -500 Balance 46,500 +24000 +25000 +5000 +8400 - =6000 +1,02,900 Note: The equation remains balanced Ex. 7: Sum up the effects of the following transactions on the accounting equation. 2024, March, 1 Suresh begins business with cash ₹50,000. 2 Takes a loan from Manish ₹20,000. 3 Buys a computer for cash, ₹58,000. 6 Buys supplies on credit ₹6,000. 9 Sales software for cash ₹12,000. 12 Pays for a part of the supplies bought on March 6, ₹2000. 17 Uses supplies for personal purposes, ₹1000. 23 Returns defective supplies for immediate refund ₹1900. 26 Pays salaries ₹4000, and office rent ₹1200. 29 Sells software on credit, ₹8,000. 30 Withdraws cash for personal use, ₹3,500. 31 Uses supplies for business purposes, ₹1,400. ***** 12 of 12