14 July 2019
I want to prepare Capital A/c of sole proprietor. Kindly tell all possible content of Debit side and Credit Side of Capital A/c of Sole Proprietor. Can i add interest credited on saving or current bank account to credit side of Capital A/c? Also please tell if i Debit following items to Debit side of Capital A/c: Premium on Insurance, Tution Fee, Mutual Fund, PPF etc.? Thanks in advance.
15 July 2019
I hope that you are doing some business. Interest on current / saving bank would be shown as other income in profit & loss account. You need to prepare Profit & Loss account containing the income or expenditure from business. The profit will be added to the capital account and the drawing that you have made will be deducted from the capital account.
15 July 2019
Thank you madam for your reply. Please tell what to do, if i make payment towards insurance policies of my own, mutual fund of my own, own ppf and personal medical expenditure? Can i record it to the debit side of Capital A/c as it is belongs to owner personal level?
16 July 2019
Thank you Madam. I am grateful to you. I have done Caiptal A/c of sole Proprietor as follows. Please tell tell me is there any correction? Capital Account For the Year Ending 31st March 2019
Dr. Side Particulars Amount Amount To Drawings 364477 To Life Insurance Premium 78011 To Mediclaim Premium 11360 To Tution Fee 50000
To Balance C/D 671833
Total 1175681
and Credit Side:
Particulars Amount Amount By Balance B/D 781126 By Net Profit 392460 By Saving Bank Interest HDFC Bank - 00641000156733 1865 By I Tax Refund 230
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