Final answer:
The Accounting Equation, which states that Assets = Liabilities + Owner's Equity, is demonstrated to be balanced in each transaction undertaken by Sameer Goel. Equivalent changes in assets, liabilities, and owner's equity are made with each financial event, proving the equation remains satisfied.
Step-by-step explanation:
To prove that the Accounting Equation is satisfied in all the transactions of Sameer Goel, we need to ensure that at each stage, Assets = Liabilities + Owner's Equity. We'll review each transaction accordingly:
(i) Started business with cash ₹ 10,000.
This increases assets (cash) and owner's equity (capital) by ₹ 10,000. Accounting equation remains balanced: Assets (₹ 10,000) = Liabilities (₹ 0) + Owner's Equity (₹ 10,000).
(ii) Paid rent in advance ₹ 300.
This decreases assets (cash) by ₹ 300 but increases another asset (prepaid rent) by the same amount. The equation remains balanced: Assets still total ₹ 10,000.
(iii) Purchased goods for cash ₹ 5,000 and credit ₹ 2,000.
Cash purchase reduces assets by ₹ 5,000 while credit purchase increases liabilities also by ₹ 2,000. This leaves us with Assets (₹ 5,000 + ₹ 2,000) = Liabilities (₹ 2,000) + Owner's Equity (₹ 10,000).
(iv) Sold goods for cash ₹ 8,000 costing ₹ 4,000.
Assets increase by ₹ 8,000 due to the cash sale, while the cost of goods sold amount of ₹ 4,000 reduces the assets too, resulting in a net increase of ₹ 4,000 in assets. The equation remains in balance.
(v) Paid salary ₹ 450 and salary outstanding being ₹ 100.
Assets decrease by the paid amount, and liabilities increase by the outstanding amount. The equation is still balanced.
(vi) Bought motorcycle for personal use ₹ 3,000.
This transaction is a draw from the business and reduces both assets and owner's equity by ₹ 3,000, keeping the equation in balance.
In conclusion, after every transaction, the total assets are equal to the sum of liabilities and owner's equity, thus satisfying the Accounting Equation.