If equity = Rs. 80,000, other liabilities = Rs. 50,000 and profits for the year = Rs. 20,000. What will be the value of the assets?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs.1,50,000
The accounting equation says that assets always equal what is owed to the owners and to outsiders: Assets = Equity (capital) + Liabilities. The profit for the year belongs to the owners, so it adds to equity.
Equity at the end of the year = Rs. 80,000 + Rs. 20,000 = Rs. 1,00,000
Assets = Rs. 1,00,000 + Rs. 50,000 = Rs. 1,50,000
NCERT (2026-27 edition):
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