Accounts of a proprietor company

My wife has also put money into the business. Is she also a capital account ?

Can there be more than 1 capital accounts ?

Originally posted by : Poornima Madhava
	Capital account means the money that you put into the business, in this case it is Raminder singh Sandhu. Drawings account is the account from which you withdraw money from the business. Thus, Raminder singh Sandhu is a capital account Holistic Consultants is a sundry creditor account

Raminder Singh Sandhu is my savings account and Holistic Consultants is current account of my company. Please explain the above.

Capital accounts can only be in the name of the proprietor. If your wife has provided funds for your business, then you can treat it as either loan from her or else treat it as capital from you (by borrowing from her). I have already explained this earlier.

1. Okay, what I thought was that the computer was purchased from Holistic Consultants. Hence I told you to treat it as sundry creditors.
2. Do you also maintain the SB account details in the books of the business? If no, then the entry would be: Computers Dr. To Capital A/c (it doesn't matter whether the bank account is actually an SB account or not, but for the business it is a capital a/c)
3. Also, if the name of your concern is Holistic Consultants, then there is no need to create an account in the name of the concern itself.

Hope it is clear. If not, I suggest that you go through basic concepts of accounting.

I have tried some videos on youtube. Please suggest something online for Basic accounting.

See if this helps: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCUQFjABahUKEwjppc-b4uzHAhVQSo4KHYc3AQs&url=http%3A%2F%2Fwww.nios.ac.in%2Fmedia%2Fdocuments%2FVocInsServices%2Fm1-5f.pdf&usg=AFQjCNGb5eiqSMbF11PvZuwBnr0yXFHTLg&sig2=b5FpgeKOUBRWx7kTsCFXsg&cad=rja

Thank You very much. The pdf was helpful.

I am doing entries in Tally now. Please clarify the following:

- I have paid for office telephone bill through my savings bank account. To enter this transaction, What all accounts are needed to be created and please explain the transaction also. (My name is Raminder Singh and my company name is Holistic Consultants) 

A): If you DO NOT maintain the SB account transactions in tally:

1) Telephone expenses Dr.

To Raminder Singh - Capital (or Current A/c)

Note: use capital account (under capital a/c group) when you want to treat is as capital to the business OR current account (under current liability) when you want to treat is as current a/c transaction)

B): If you DO maintain SB account transactions in tally:

1) Telephone exps: Dr.

To SB A/c (under bank accounts)

I do not maintain SB transactions in tally. Therefore I tried your option A, but Tally won't accept the entry in "PAYMENT" voucher type. So I tried with "JOURNAL" and it accepted the entry. 

So should I do the JOURNAL entry for this ?

What exactly is JOURNAL (F7) voucher for ?

Yes, journal entry is right.

and the transaction that is made from my wife's account ?

e.g. Sonam paid 50000 for software license. IN TALLY, can I show her also as Capital Account ? or should I enter the transaction on my name and in Narration I can mention that it is paid through her SB account.

P.S. I don't maintain her SB account transactions in Tally.

Capital account can only be created for you since you are the proprietor. You may consider the payment by your wife as loan in the books. Entry would be:

1) Software license (under fixed assets) Dr. 50000

To Loan from Sonam (under loans) Cr 50000

Originally posted by : Poornima Madhava
	Capital account can only be created for you since you are the proprietor. You may consider the payment by your wife as loan in the books. Entry would be: 1) Software license (under fixed assets) Dr. 50000 To Loan from Sonam (under loans) Cr 50000

About the account groups, software licenses are for 1 year only(every year I have to re pay), will it be in current assets or in fixed assets ?

Also, Sonam in loans or unsecured loans ?

Okay, if it is for annual renewal, then better treat it as subscripttion & renewal expenses (under indirect expenses). Sonam will be under unsecured loans group.

Security paid for anything will be in which account group ?

e.g. I have paid 100000/- security to my landlord. It will be returned when and if I leave the place.