Question

raj started business with cash Rs.1,00,000 and a building valued at Rs. 5,00,000

Answer 1

Cash account debit 100000

Building account debit 500000

To capital account credit 600000

Answer 2

Answer: The journal entry for this transaction would be:

Cash Alc..........     Dr.               ₹100000  
Building A/c.....    Dr.               ₹500000
       To Capital A/c                                        ₹600000
(Being business started with cash and
building)

Explanation:

Journal Entry:
A journal entry is an act of maintaining records of transactions, either economic or non-economic. Transactions are recorded in an accounting journal depicting a company's debit and credit balances. The journal entry can consist of numerous recordings and transactions, each of which is either debit or credit.

Golden rules of accounting:

1) Debit The Receiver, Credit The Giver: For personal accounts

2) Debit What Comes In, Credit What Goes Out:  For real accounts

3) Debit All Expenses And Losses, Credit All Incomes And Gains: For nominal accounts

In the given question, cash and building are both real accounts coming into the business; they are debited.
Capital, on the other hand, is a personal account, as the business receives the amount, ∴ it is credited.

∴ Journal entry for the question=

Cash Alc..........     Dr.               ₹100000  
Building A/c.....    Dr.               ₹500000
       To Capital A/c                                        ₹600000
(Being business started with cash and
building)

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