9:null 17:T4a0,undefined The basic accounting equation is: **Assets = Liabilities + Capital** When revenues and expenses are incorporated, they affect the owner's capital. Revenues increase capital whi<= expenses decrease capital. The net effect is represented as (Revenues − Expenses), which is the profit or loss for the period. The expanded equation becomes: **Assets = Liabilities + Capital + (Revenues − Expenses)** Here's why this makes sense: • Revenues >=nerate income that belongs to the owner, increasing their equity • Expenses reduce the owner's equity as they represent costs incurred • The difference (Revenues − Expenses) shows the net chan>= in capital If Revenues > Expenses → Profit → Capital increases If Revenues < Expenses → Loss → Capital decreases

Examining the other options: **Option 1** incorrectly subtracts income from the equation **Option 3** has the wrong structure and doesn't maintain the equation's balance **Option 4** comp<=tely misrepresents the fundamental accounting relationship The correct answer is **Option 2** as it properly shows how revenues and expenses impact the accounting equation whi<= maintaining the fundamental balance.18:T4a0,undefined The basic accounting equation is: **Assets = Liabilities + Capital** When revenues and expenses are incorporated, they affect the owner's capital. Revenues increase capital whi<= expenses decrease capital. The net effect is represented as (Revenues − Expenses), which is the profit or loss for the period. The expanded equation becomes: **Assets = Liabilities + Capital + (Revenues − Expenses)** Here's why this makes sense: • Revenues >=nerate income that belongs to the owner, increasing their equity • Expenses reduce the owner's equity as they represent costs incurred • The difference (Revenues − Expenses) shows the net chan>= in capital If Revenues > Expenses → Profit → Capital increases If Revenues < Expenses → Loss → Capital decreases

CUET Accountancy 2025 27 May Shift 2 PYQs

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