Assets=Liabilities + Equity
Transaction 1: Issue of Shares: Company issues shares worth Rs. 100,000.
Transaction 2: Purchase of Office Building: Buys office building for Rs.60,000 (paid
in cash).
Transaction 3: Bank Loan: Takes a loan of Rs.50,000 from a bank.
Transaction 4: Purchase Equipment: Buys equipment worth Rs.20,000 on credit.
Transaction 5: Earn Revenue: Provides IT services and receives Rs.30,000 cash.
Transaction 6: Pay Salaries: Pays Rs.10,000 in salaries.
Transaction 7: Pay Partial Accounts Payable: Pays Rs.5,000 cash to suppliers for
equipment purchased earlier.
Transaction 8: Receive Cash Advance from Customer: Receives Rs.8,000 from a
client for services to be provided next month.
Transaction 9: Pay Utility Bills: Pays Rs.2,000 in utilities.
Transaction 10: Provide Services on Credit: Provides IT services worth Rs.12,000
on credit
Transaction 11: Paid dividend: 6000
Transaction 12: Purchase Inventory (Cash)
Buys software licenses (inventory) worth ₹15,000 in cash.
Decreases Cash, increases Inventory (Asset).
Transaction 13: Sell Inventory (Cash)
Sells some licenses for ₹20,000 in cash. Cost of goods sold = ₹12,000.
Cash increases ₹20,000, Inventory decreases ₹12,000, Profit (Equity)
increases ₹8,000.
Transaction 14: Pay Office Rent
Pays ₹5,000 rent for office premises.
Cash decreases, Expense decreases Equity.
Transaction 15: Depreciation on Building
Charges depreciation of ₹3,000 on building.
Decreases Building (Asset) and Equity (Expense).
Transaction 16: Depreciation on Equipment
Charges depreciation of ₹4,000 on equipment.
Decreases Equipment (Asset) and Equity (Expense).
Transaction 17: Interest Paid on Bank Loan
Pays ₹2,500 as interest on bank loan.
Cash decreases, Equity decreases (Finance cost).
Transaction 18: Services Provided — Partly Cash, Partly Credit
Performs IT services worth ₹25,000; receives ₹15,000 in cash and ₹10,000 on
credit.
Cash ↑ ₹15,000, Accounts Receivable ↑ ₹10,000, Equity ↑ ₹25,000
(Revenue).
Transaction 19: Advance Payment for Next Year’s Insurance
Pays ₹6,000 for an annual insurance policy starting next month (Prepaid
Expense).
Cash decreases, Prepaid Expense (Asset) increases.
Transaction 20: Issue of Additional Shares
Company issues new shares for ₹40,000 cash.
Cash increases, Share Capital increases.
