banner_ad

Balance of goods coming in negative while using Basic Accounting equation

Others 1232 views 2 replies

I was solving a question related to posting of Journal entry for given question. Out of curiosity, I tried to solve it using basic accounting equation i.e. Assets = Liability+ Capital. After completing it I found that Goods balance is in negative. I am sure that I have not made any mistake in it (file attached). Have i done something wrong during the process? If not what does the negative sign signify?

Solution:


Attached File : 3390089 20210516202052 account practice sheet.xlsx downloaded: 75 times
Replies (2)
Use Golden Rule

Asset= liability+capital is true. But when you spend cash or goods, the retained earning will reduce. That is why your balance sheet tallies. Assets reduce, your liabilities reduce. I hope you got it in the other problem as well.


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
Featured 27 May 2026
Lead Conversion Executive / Sales Closing Executive

SMJ global advisors pvt ltd

New Delhi

B.Com

View Details
Company
01 June 2026
Audit, Taxation & Compliance Executive

R P S K & Associates

Nashik

CA Inter

View Details
Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
10 June 2026
Senior Account Executive

JDS Advisory LLP

Ahmedabad

CA Inter

View Details
Company
04 June 2026
Semi Qualified CA

Goyal Puneet & Associates

New Delhi

CA Final

View Details
Company
26 May 2026
Audit executive

vdsr & co LLP

Chennai

CA Inter

View Details
Company
24 May 2026
Accounts & Tax Executive

PARAS KHURANA AND CO

New Delhi

B.Com

View Details