Originally posted by : NARENDRA |
|
Dear My Videos,
Ur Query -1
" I want to know that is it better to create a capital account of owner of sole proprietor (who is partner in partnership now and not operating proprietorship business) in partnership books ? "
Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.
2
and after opening it, can we pass following entry to transfer the balances of sole proprietorship in partnership books:
Debtor 1 Dr.
Debtor 2 Dr.
Bank Dr.
Cash Dr.
Fixed Assets Dr.
Owner of sole proprietorship capital account Cr. (Here I am supposing that no current liability is exist)
Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly .
3
Moreover, for keeping record clear, we can follow fluctuating method in partnership and under this method, we can open a current account of proprietorship owner in partnership.
If we earn profit or loss, it will go in current account and capital account of proprietorship can be reduced by drawing account if we want to pay received amount of debtors which transferred from proprietorship.
Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.
|
|
Dear Narendra Sir,
Thanks for your valuable reply.
Your reply of 1st query:
Ans. : - Yes you can create a capital account in partnership books & you may be credited to it.
My Response: Thanks for confirmation or endorsement.
Your reply of 2nd query:
Ans :- I don;t understand , what is this ?? Why should we debit to the Bank,Cash, Fixed Assets ??? See your actual questions was that, that sole proprietor made invoices & customer deposits in partnership's account. Important thing is that when a sole proprietorship business converts into a partnership firm, what are their terms about how to carry all the debit & credit balances in partnership firms?? Do things accordingly.
My Response: I would like to inform you that the term at the time of converting proprietorship to partnership are:
All the bank fund, cash in hand, debtors will transfer into partnership as well as liabilities of proprietorship will pay from partnership.
That is why for transferring amount of above accounts, I will open capital account of proprietorship in partnership and debit all the balances of propritoship assets in partnership to increase the assets.
Please let me know is it correct procees to transfer balances ? If you have better solution, please share as I mentioned terms which you asked.
Your reply of 3rd query:
Ans: No i don't think such kind of an exercise happening in accounts, but wait for any experts answers regarding this.
My Response:
No answer of any expert received yet.
Can you help me to get answer of this query from any of your friend, colleague and experts in your circle ?
Your kind response in this regard will be highly appreciated.