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Double Entry Accounting's basic rule is, for every entry there must be an equal and opposite entry.
If a person invest $50,000 into his company in cash, Cash is debited showing an increase, while Capital is Credited, the opposite entry.
The accounting equation is
Assets = Liabilities + Owners Equity (Capital)
A better way of putting this might have been Assets - Liabilities = Owners Equity (Capital)
Which tells me, the OE (Capital) of any company is equal to what is left after all liabilities are subtracted (deducted) from the companies assets.
The transaction mentioned above would look like this
$50,000 = $0 + $50,000 A = L + OE
or
$50,000 - $0 = $50,000 A - L = OE
What else can I help you with?
What is the accounting entry to reduce a reserve account?
Reserve account can be reduce as follows: [Debit] Reserve account xxxx [Credit] Share capital account xxxx
What is owner's current account and it's accounting entry?
owners current account is called a personal account and it has a credit entry
What is the journal entry to interest on capital?
[Debit] Interest on capital account xxxx [credit] Capital account xxxx
What is the journal entry for Share capital and Paid up Capital?
[Debit] Cash account xxxxx [Credit] Share application account xxxxx Entry 2 [Debit] Share Application account xxxxx [Credit] Share Capital Account xxxxx
How do you record drawings in accounting?
Drawings in accounting are recorded as a double entry in the cash book. This is a credit to the bank account and a debit to the cash account.
What is the accounting entry to reduce a reserve account?
Reserve account can be reduce as follows: [Debit] Reserve account xxxx [Credit] Share capital account xxxx
What is owner's current account and it's accounting entry?
owners current account is called a personal account and it has a credit entry
What happens to balance on drawings account at the end of accounting year?
Balance of drawing account is write off against owners capital at the end of fiscal year. Journal entry is as follows: [Debit] Owners capital [credit] Drawings account
Is a Decrease in cash a credit?
In a double entry accounting system, you decrease the cash account with a credit.
What is the financial accounting entry for check cashing?
[Debit] Cash account [Credit] bank account
What is the journal entry to interest on capital?
[Debit] Interest on capital account xxxx [credit] Capital account xxxx
What is the journal entry for Share capital and Paid up Capital?
[Debit] Cash account xxxxx [Credit] Share application account xxxxx Entry 2 [Debit] Share Application account xxxxx [Credit] Share Capital Account xxxxx
How do you record drawings in accounting?
Drawings in accounting are recorded as a double entry in the cash book. This is a credit to the bank account and a debit to the cash account.
What is the account entry if an asset is acquired at no cost?
Debit Assets account and credit Capital Account
What should be Journal entry for purchase of building from capital reserve account?
Credit your capital account, debit the freehold property account
What is the journal entry to close expense accounts includes?
The purpose of the closing entry is to bring the temporary journal account balances to zero for the next accounting period, which aids in keeping the accounts reconciled.
What is the journal entry when capital is introduced by depositing into bank?
Debit Bank account xxxx Credit Capital account xxxx
