Q.What is an Opening Entry? On 1st April 2024, Mr. Anil's books showed the following balances brought forward: Cash ₹25,000; Bank ₹40,000; Stock ₹30,000; Furniture ₹15,000; Prakash (Debtor) ₹10,000; Suresh (Creditor) ₹8,000; Bank Loan ₹20,000. Pass the opening entry.
An Opening Entry is passed at the start of a new accounting year to record the balances of assets, liabilities and capital brought forward from the previous year's Balance Sheet. All asset accounts are debited; all liability accounts and the Capital account are credited. Where Capital is not directly given, it is found as: Capital = Total Assets − Total Liabilities.
Working:
Total Assets = Cash 25,000 + Bank 40,000 + Stock 30,000 + Furniture 15,000 + Prakash (Debtor) 10,000 = ₹1,20,000
Total Liabilities = Suresh (Creditor) 8,000 + Bank Loan 20,000 = ₹28,000
Capital = 1,20,000 − 28,000 = ₹92,000
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 2024 Apr 1 | Cash A/c.....................Dr. Bank A/c.....................Dr. Stock A/c.....................Dr. Furniture A/c.................Dr. Prakash's A/c................Dr. To Suresh's A/c To Bank Loan A/c To Capital A/c (Being balances of assets, liabilities and capital brought forward from the previous year) | 25,000 40,000 30,000 15,000 10,000 | 8,000 20,000 92,000 |
Check: total debit = ₹1,20,000 = total credit (8,000+20,000+92,000). The entry balances.
Capital = ₹92,000 (Assets 1,20,000 − Liabilities 28,000). Opening entry: Cash A/c Dr. 25,000, Bank A/c Dr. 40,000, Stock A/c Dr. 30,000, Furniture A/c Dr. 15,000, Prakash's A/c Dr. 10,000; To Suresh's A/c 8,000; To Bank Loan A/c 20,000; To Capital A/c 92,000.
Unlock everything free for 14 days
- Full step-by-step solutions
- Concept-first explanations
- Methods, shortcuts & mistakes
- PYQ mapping + timed mock tests
Full access for 14 days. No credit card required.