can i prepare a cash/bank account with no opening balance & just some expenses & incomes. the company has commenced it operations last year 09-2010. also pls guide me the treatment of proprietors capital and a loan from an outsiders in the ledger accounts as well as trial balace . pls help
Dear Neena,
When capital is introduced in the form of cash, the entry would be,
Cash/Bank A/c Dr
To Capital
(being capital introduced in the business)
When loan is borrowed from an ousider,
Cash/Bank A/c Dr
To Loan
(Being loan accepted from ......)
Hence, loan and capital will be shown in the TB in the credit side. the same will be shown as a liability in the BS
There is no necessity that there must be an opening balance in the cash in the first year of opertaion. So u can start will nil balance in ur cash/bank account
BUT CASH BALANCE MUST BE DEBIT BALANCE ON EACH DAY.
Agree with Mugund
| Originally posted by : CA.G.Muguntha Narayanan | ||
 |
Dear Neena, When capital is introduced in the form of cash, the entry would be, Cash/Bank A/c Dr To Capital (being capital introduced in the business) When loan is borrowed from an ousider, Cash/Bank A/c Dr To Loan (Being loan accepted from ......) Hence, loan and capital will be shown in the TB in the credit side. the same will be shown as a liability in the BS There is no necessity that there must be an opening balance in the cash in the first year of opertaion. So u can start will nil balance in ur cash/bank account |
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Agree wiith Narayan Sir
agree with NARAYANAN SIR
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
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