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Capital acc entry

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ABHI KUMAR

20 Points Posted on 02 May 2021

when single owner starting business with cashh 50000 rs what is right entry
OWNER CAPITAL AC CREATE NAME OR JUST PASS ENTRY
CASH
TO CAPITAL what is the right method

Replies (9)

Quick Summary

This discussion clarifies the correct accounting entry when a sole proprietor starts a business with an initial cash investment of Rs. 50,000. The consensus is to debit the Cash account to reflect the liquid asset and credit the Capital account, representing the owner's equity and the business's liability to them. The entry is Cash (Dr) 50,000 to Capital (Cr.) 50,000, which can also be specified as 'Owner's Capital Account' or the owner's name.

Anand Singh

Accountant

20 Points Posted on 03 May 2021

Cash of Rs. 50,000 will be debited as a liquid asset introduced by the proprietor in business. Capital A/c will be credited as capital is the liability of the business to pay the proprietor.
The capital account of the proprietor is shown as the owner's in the book

Pass entry
Cash to capital

Cash (Dr) 50,000
To Capital (Cr.) 50,000

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