Journalize the following transaction: Ram Chandra commenced business with cash of Rs. 1,00,000.

Question

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This is an accounting transaction. Step 1: Identify the accounts affected. When Ram Chandra commences business with cash, the Cash Account (an asset) and the Capital Account (owner's equity) are affected. Step 2: Determine the nature of the change in each account. Cash increases because the business receives money. Capital increases because the owner's investment in the business increases. Step 3: Apply the rules of debit and credit. An increase in an asset is debited. An increase in owner's equity is credited. Step 4: Record the journal entry. l — l — r — r Date & Particulars & Debit (Rs.) & Credit (Rs.) 1. & Cash A/c & 1,00,000 & & To Ram Chandra's Capital A/c & & 1,00,000 & (Being business commenced with cash) & &

Journalize the following transaction: Ram Chandra commenced business with cash of Rs. 1,00,000.

Step-by-step solution

Identify the accounts affected.

Determine the nature of the change in each account.

Apply the rules of debit and credit.

Record the journal entry.

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