Capital account doubt

The entry would be .....

1.      Interest  A/c..................Dr

             To Interest on Capital  A/c

2.     P/lL   A/c..................Dr

             To Capital A/c

Thus the debit balance of P/l should be shown in Assets side of B/s And Interest on Capital Shouls be should be shown in the Liability side of Balance Sheet.
 

So, can't be a business which has no P&L a/c ?

There are many cases where real estate players who recognise their revenue on contract completion basis do not file a P&L account but file only a Balance sheet ...

Originally posted by : Kannan Narayanan
	So, can't be a business which has no P&L a/c ? There are many cases where real estate players who recognise their revenue on contract completion basis do not file a P&L account but file only a Balance sheet ...

Download the Attached file and read carefuly.........

agree with suresh

As far I think if it is a proprietorship firm you cannot charge any Interest on Capital. Interest on Capital is charged in Partnership firm not Proprietorship.

If it is a propriteroy firm then it might have interest from bank so asset side would automatically increase,isnt it possible?