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deposited my entire retirement package of R2500 in cash in a bank account in the name of my business how to put into a accounting equation

User Nervosol
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1 Answer

2 votes

Answer: You can use the following fundamental accounting equation to include your retirement package deposit:

Explanation:

Liabilities + Equity = Assets

In this instance, the R2,500 cash deposit would be regarded as an asset. The equity in the company will rise by the same amount as the asset, assuming there are no obligations connected to this deal.

i) Assets = Liabilities + Equity in the first equation.

ii) You make a cash deposit of R2,500 into the company's bank account.

iii) New formula: Assets (Cash) = Liabilities (Money) + Equity (Capital).

Since this transaction involves no obligations, you may reduce the equation to:

Equity (Capital) = Assets (Cash)

As a result, this is how you would record the deposit:

Cash assets grow by R2,500.

Additionally, equity (capital) rises by R2,500.

User Tammen
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