{"id":373,"date":"2025-06-18T11:18:42","date_gmt":"2025-06-18T10:18:42","guid":{"rendered":"https:\/\/www.thetrainingplace.org\/blog\/?p=373"},"modified":"2025-06-27T10:29:33","modified_gmt":"2025-06-27T09:29:33","slug":"the-accounting-equation","status":"publish","type":"post","link":"https:\/\/www.thetrainingplace.org\/blog\/2025\/06\/the-accounting-equation\/","title":{"rendered":"The Accounting Equation"},"content":{"rendered":"\n

Accounting Equation:
<\/p>\n\n\n\n

ASSETS \u2013 LIABILITIES = CAPITAL
<\/p>\n\n\n\n

QUESTION:<\/p>\n\n\n\n

Anushka began a sole trade business on 1 January 20X1. During the first month of trading, the following transactions took place:<\/p>\n\n\n\n

She started the business with \u00a35,000 of cash
She took out a loan from the bank of \u00a310,000
She purchased a van for \u00a312,000 cash
She purchased 100 units of inventory on credit at a total cost of \u00a32,500
She sold 10 units of inventory to a customer on credit for a total of \u00a3400
She repaid \u00a3250 of the loan from the business bank account
She took \u00a310 from the business bank account to cover a personal expense<\/p>\n\n\n\n

Calculate the ASSETS, LIABILITIES and CAPITAL of Anushka’s business.<\/p>\n\n\n\n

<\/p>\n\n\n\n

ANSWER:<\/p>\n\n\n\n

Assets = \u00a317,240 (\u00a35,000 + \u00a310,000 + \u00a312,000 – \u00a312,000 + \u00a32,500 – \u00a3400 + \u00a3400 – \u00a3250 – \u00a310)<\/p>\n\n\n\n

Liabilities = \u00a312,250 (\u00a310,000 + \u00a32,500 – \u00a3250)<\/p>\n\n\n\n

Capital =\u00a34,990 (\u00a35,000 – \u00a310)<\/p>\n\n\n\n

AAT Level 1 & 2 | The Training Place<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Accounting Equation: ASSETS \u2013 LIABILITIES = CAPITAL QUESTION: Anushka began a sole trade business on 1 January 20X1. During the first month of trading, the following transactions took place: She started the business with \u00a35,000 of cashShe took out a loan from the bank of \u00a310,000She purchased a van for \u00a312,000 cashShe purchased 100 units … Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20,24,21],"tags":[],"class_list":["post-373","post","type-post","status-publish","format-standard","hentry","category-aat","category-introduction-to-bookkeeping","category-level-2"],"yoast_head":"\nThe Accounting Equation - The Training Place Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.thetrainingplace.org\/blog\/2025\/06\/the-accounting-equation\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Accounting Equation - The Training Place Blog\" \/>\n<meta property=\"og:description\" content=\"Accounting Equation: ASSETS \u2013 LIABILITIES = CAPITAL QUESTION: Anushka began a sole trade business on 1 January 20X1. 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