Ram started business with cash
Answers
Explanation:
golden principles of accounting .
personal account rule
dr- the receiver.
cr- the giver.
real account rule
dr- what comes in.
cr- what goes out.
nominal account rule.
dr- all expenses and losses.
cr- all incomes and gains.
the journal entry will be.
cash a/c dr
to capital a/c
( being business commenced with cash).
here cash a/c is debited because it is coming into the business, refer real a/c rule.
here capital a/c is credited because it is given by the proprietor. refer personal account rule.
Answer
Let us recall the rules of journal
Golden Rules of Journal
Personal account rule
Debit- The receiver.
Credit- The giver.
Real account rule
Debit- What comes in.
Credit- What goes out.
Nominal account rule
Debit- All expenses and losses.
Credit- All incomes and gains.
Now
The journal entry will be
Cash A/C DR
To Capital A/C
( Being Business started with cash)