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Aravind started bussines with capital of 500000 by cash jounel entry​

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for exampleThe cash a/c is debited as it is an asset for the BUSINESS and the capital a/c is credited as it is a liability for the business according to the business entity concept.1. According to the golden rules of accounting:Cash a/c Debit Debit what COMES inTo Capital a/c Credit Credit the giver(being business COMMENCED with cash)2. According to the modern rules of accounting:Cash a/c Debit Debit the increase in assetTo Capital a/c Credit Credit the increase capital(being business commenced with cash)ExampleMr. A commenced business with cash (capital) amounting to 1,00,000. The journal ENTRY in the books of Mr. A is as followsCash a/c Debit 1,00,000To Capital a/c Credit 1,00,000(being business commenced with cash)



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