Question

state the rules of debit and credit of capital​

Answer 1

Answer:

Accounting Element (1) Normal Balance(2) To Increase(3) To Decrease(4)

1. Assets(1) Debit (2) Debit(3) Credit(4)

2. Liabilities Credit Credit. Debit

3. Capital Credit Credit Debit

4. Withdrawal Debit Debit Credit

5. Income Credit. Credit. Debit

6. Expense Debit Debit. Credit

Explanation:

I hope you got an understanding..if it works.plz mark me as brainliest..Thank you..

Answer 2

ANSWER :

The rules for debit and credit of Capital Account are mentioned below :

• ★ When there is an increase in the Capital, it is 'Credited'.

• ★ When there is a decrease in the Capital, it is 'Debited'.

__________________________________________________________

EXAMPLE :

❒ Situation 1 : When Capital Account is Credited :-

• ❖ Mr. Sharma started business with Rs. 1,00,000.

❒ Analysis of the transaction under American Approach or Modern Approach :-

• ✎ Two aspects of the transaction are : Cash A/C and Capital A/C

• ✎ Cash A/C is an Assets Account. As per the rules of debit and credit, Assets Account is debited when Assets increases and credited when Assets decreases. In this transaction, as an Asset, Cash increases and hence, Cash A/C will be Debited.

• ✎ Capital A/C comes under Capital Account. As per the rules of debit and credit, Capital Account is debited when Capital decreases and credited when Capital increases. In this transaction, as Capital increases, Capital A/C will be Credited.

❒ Journal Entry :-

• $\bigstar \: \sf{Cash \: \: A/C \: \: Dr. \: \: \: \: \: \: Rs. \: 1,00,000} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \sf{ To \: \: Capital \: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: Rs. \: 1,00,000} \\ \\ \bf{ [Being \: \: business \: \: started \: \: with \: \: cash] }$

____________________________________________

❒ Situation 2 : When Capital Account is Credited :-

• ❖ Mr. Sharma withdraw Rs. 8000 for his personal use.

❒ Analysis of the transaction under American Approach or Modern Approach :-

• ✎ Two aspects of the transaction are : Cash A/C and Drawings A/C.

• ✎ Cash A/C is an Assets Account. As per the rules of debit and credit, Assets Account is debited when Assets increases and credited when Assets decreases. In this transaction, as an Asset, Cash decreases and hence, Cash A/C will be Credited.

• ✎ Drawings A/C comes under Capital Account. As per the rules of debit and credit, Capital Account is debited when Capital decreases and credited when Capital increases. In this transaction, Capital of the business decreases in the form of drawings and hence Drawings A/C will be Debited.

❒ Journal Entry :-

• $\bigstar \: \sf{Drawings\: \: A/C \: \: Dr. \: \: \: \: \: \: Rs. \: 8,000} \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \\ \: \: \: \: \sf{ To \: \: Cash \: \: A/C \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: \: Rs. \: 8,000} \\ \\ \bf{ [Being \: \: cash \: \: withdrawn \: \: for \: \: personal \: \: use]}$