Can capital go negative ?

My query is, We have two partners in a company x and y. We have created two a/c x and y under capital a/c. Some times x & y receive cash from cash counter and they expense it for company purpose. will it be right if we Dr. X or Y a/c ? My colleague say X or Y a/c will be Dr. but according to accounting rules we never Dr. capital a/c. and in this case his capital will be in negative. I m trying to understand him that we should create imprest a/c with x or y name. Dear Sir, Humbly request clarify this issue
Replies (1)

i think you can directly book the expenses of firm and cash paid out, i assume that both partner working as active partner. hence they can use money for firm purpose. unexpensed money can be Dr to partner A/c if any, if more money expensed by partner then make additional payment by cash to partners, hope u get my ans

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