Question

Mr.samarth started business with a capital of Rs.500000

Answer 1

Answer:

Mr.samarth started business with a capital of rs.500000

Explanation:

Answer 2

The Journal Entry for this question will be as follows :

Cash A/c                 ---------dr        5,00,000

      To Capital A/c                                       5,00,000

( Being a business started by investing cash.)

According to the question,

• Mr. Samarth decided to commence a business by investing a Cash amount of Rs. 5,00,000.
• As the cash of business increases and it is a real account of asset nature so to show the increase in the value it is to be debited.
• Capital is the equity of the owner of the business firm, it can be in form of any asset such as cash, goods, furniture, bank balance, equipment, or plant and machinery.
• When a person decides to commence a business they must invest in the same for performing the operations.

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