If a business purchases goods worth ₹60,000 paying ₹20,000 cash and the balance on credit, the accounting equation will show:
A. Increase in assets ₹60,000, increase in liabilities ₹60,000
B. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹20,000
C. Increase in assets ₹60,000, increase in liabilities ₹40,000, decrease in capital ₹0
D. Increase in assets ₹40,000, increase in liabilities ₹40,000
Answer: Option C
Solution (By JKSSB Mock Tests)
Assets increase by ₹60,000 (stock), cash decreases by ₹20,000, net assets increase ₹40,000; liabilities increase by ₹40,000 (creditors). Capital is unchanged. Equation: Assets = Liabilities + Capital, here +40,000 = +40,000 + 0.
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