Question

Neerose commenced his business with a capital of 1000000.journalise

Answer 1

Cash A/c.. Dr. 10,00,000

.......To capital a/c..... 10,00,000


[. Being. Business started with. Cash ]

Answer 2

this transaction affects two accounts... cash a/c(cash is brought in) an d capital a/c(capital introduced)..cash a/c and capital a/c are real accounts(all assets and liabilities come under it..here cash is an asset... capital is a liability).


the three golden rules of accounting are

personal account - debit the reciever, credit the giver

nominal account- debit all expenses and losses, credit all incomes and gains

real account- debit what comes in, credit what goes out

so in contention with the above rules.. capital account should credited since cash is going out/liabilty is increasing..cash account should be debited since cash is coming in...

so the journal entry will be

cash a/c Dr 1000000

To capital a/c 1000000

(being capital brought in)