Question

Ashok started business with good rs 1000 and cash rs 5000 borrowed from sushil

Answer 1

Answer:

The journal entry for commencing the business with cash and goods is shown below:

Explanation:

For starting business

Cash A/c.................Dr    Rs 5,000

Inventory A/c..........Dr    Rs 1,000

       To Capital A/c.......Cr   Rs 6,000

As the cash and inventory account is debited because both are coming into the business and on the other hand capital account is credited.

For borrowing cash from Sushil

Cash A/c..........Dr   Rs 5,000

     To Loan A/c.....Cr  Rs 5,000

As Ashok borrowed from Sushil, cash is coming so it is debited and it is a loan so loan account is credited.