# 1.6 Show the dual aspect, as it affects the accounting equation (assets - liabilities = capital),...

1.6 Show the dual aspect, as it affects the accounting equation (assets - liabilities = capital), of the following transactions for a particular business: • owner starts in business with capital of £8,000 in the bank • buys a computer for £4,000, paying by cheque • obtains a loan of £3,000 by cheque from a friend • buys a van for £6,000, paying by cheque

 Transaction No Assets Liabilities Capital Explanation 1 8,000.00 - 8,000.00 (Buisiness started bank balance (Asset) as Capital 2 4,000.00 - - Buys a computer(Asset) for cash/bank (Asset) (4,000.00) - - 3 3,000.00 3,000.00 - Obtains a loan (Liability) by Cheque (Asset) 4 6,000.00 - - Buys a Van (Asset) for cash/bank (Asset) (6,000.00) - - Total 11,000.00 3,000.00 8,000.00

Total Asset = 11,000

Total Libilities = 3,000

Capital = ( Assets - Liabilities ) = 8,000

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