14 June 2008
A proprietor's capital a/c must be a credit balance.It was so in one of our client's case.But, after claiming additional depreciation the capital balance becomes a debit balance.Now,what are the ways of making it a credit balance except for introducing cash and reducing exp. other than deprecition?
You can show separate Current A/c of such Capital A/c. You may decrease any adjustable liabilities like Unsecured Creditors which are on books only. Or you may create any other Assets like Goodwill. Anyother Assets brought into the books. You may bring his Residential House (if Prop. Business).
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