[petestudentacca]

for 5) TRANSACTION they told this Purchased goods for $300 cash

The purchase represents the recognition of a new asset (inventory) and a corresponding reduction in cash, so there is no change in the accounting equation, only a change in the composition of the assets. It has a reduced cash balance but now has inventory at a cost of $300.

Assets = Equity + Liabilities
1650 = 650 + 1000

I do not get this q, so if i pruchased goods, then cash is reduced for 300, and inventory is in plus for 300 Right?

Thnk you

[Author]

Posts