can i prepare a cash/bank account with no opening balance & just some expenses & incomes. the company has commenced it operations last year 09-2010. also pls guide me the treatment of proprietors capital and a loan from an outsiders in the ledger accounts as well as trial balace . pls help
7 Replies
CA.G.Muguntha Narayanan
(Internal Auditor at TVS Motors)
(2195 Points)
Replied 24 September 2010
Dear Neena,
When capital is introduced in the form of cash, the entry would be,
Cash/Bank A/c Dr
To Capital
(being capital introduced in the business)
When loan is borrowed from an ousider,
Cash/Bank A/c Dr
To Loan
(Being loan accepted from ......)
Hence, loan and capital will be shown in the TB in the credit side. the same will be shown as a liability in the BS
There is no necessity that there must be an opening balance in the cash in the first year of opertaion. So u can start will nil balance in ur cash/bank account
Dinesh Kumar Agarwal
(Article clerk)
(117 Points)
Replied 24 September 2010
BUT CASH BALANCE MUST BE DEBIT BALANCE ON EACH DAY.
Prashant Deo Pandey
(MBA-Finance)
(372 Points)
Replied 25 September 2010
| Originally posted by : CA.G.Muguntha Narayanan | ||
 |
Dear Neena, When capital is introduced in the form of cash, the entry would be, Cash/Bank A/c Dr To Capital (being capital introduced in the business) When loan is borrowed from an ousider, Cash/Bank A/c Dr To Loan (Being loan accepted from ......) Hence, loan and capital will be shown in the TB in the credit side. the same will be shown as a liability in the BS There is no necessity that there must be an opening balance in the cash in the first year of opertaion. So u can start will nil balance in ur cash/bank account |
 |
Harsha
(Chartered Accountant CS (Final))
(227 Points)
Replied 25 September 2010
Agree wiith Narayan Sir
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