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Land purchase capital effect

11 February 2022

exampl ..Mere balance sheet me capital 1500000 hai or mai 500000 ki land purchase kar raha hu iski entry kya hogy or current year ke capital me changes kya hoga balance sheet ke

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3 Replies

Eswar Reddy S (CFO- at NHTF) (58213 Points)
Replied 12 February 2022

If the land is bought for business purposes from business funds then there won't be any effect on capital.

Bank Balance will come down

Land A/c Dr

To Bank

sabyasachi mukherjee (26132 Points)
Replied 12 February 2022

Pls give proper explanation as per Golden Rule .
Here are both are real Account.
dr. what comes in
cr. what goes out.

prasad Nilugal ( GST Practitioner & Accounts ) (14183 Points)
Replied 12 February 2022

@ Sabyasachi Mukherjee

In above transaction
Land is real account
Bank is personal account and not real account .

As per the golden rules , Land is real account so real account rule is , Debit what comes in , accordingly we debited Land account , and Bank account is personal account , so personal account rule is ,credit the giver so Bank account is credited .