Back to Questions
SSC Financial and Cost Accounting P-1 QUESTION #9613
Question 1
Mr. A starts a business, invests Rs. 100,000 in cash, then purchases a building for Rs. 50,000, furniture for Rs. 10,000, and a vehicle for Rs. 15,000, all in cash. Which of the following correctly states the accounting equation after all transactions?
  • Assets = Rs. 100,000; Capital = Rs. 100,000
  • Assets = Rs. 75,000; Capital = Rs. 100,000
  • Assets = Rs. 175,000; Capital = Rs. 100,000
  • Assets = Rs. 25,000 + Rs. 75,000 = Rs. 100,000; Capital = Rs. 100,000✔️
Correct Answer Explanation
After all transactions: Cash left = 100,000 – 75,000 = Rs. 25,000. Fixed assets = Building (50,000) + Furniture (10,000) + Vehicle (15,000) = Rs. 75,000. Total Assets = Rs. 100,000. Capital (supplied by Mr. A) = Rs. 100,000. The accounting equation Assets = Capital + Liabilities holds: 100,000 = 100,000 + 0.