Q.Journalise the following transactions in the books of Mr. Arun for April 2026:

Capital introduced by the proprietor is credited to the Capital account — option (c).

The entry

When the owner brings cash into the business:

Why credit Capital?

• By the business entity concept, the business is separate from its owner; whatever the owner supplies is owed back to him. This claim of the owner on the business is Capital — a liability of the business.
• An increase in a liability is credited, so Capital A/c is credited. Cash comes in (an asset increases), so Cash A/c is debited.

Why not the others?

• (a) Cash A/c is debited here, not credited. (b) Drawings is the opposite (owner taking out). (d) Suspense A/c is only for unexplained differences.

Money brought in by the proprietor is credited to the Capital account, so the correct answer is option (a).

By the business entity concept, the business is separate from its owner. When the proprietor brings money into the business:

• The business receives cash, so Cash account is debited.
• The business now owes this amount to the owner, so Capital account is credited.

The entry is: Cash A/c Dr … To Capital A/c. Hence the amount brought in is credited to the Capital a/c.

Paid salary by cheque: Salary A/c is debited and Bank A/c is credited — option (a).

Applying the modern rules of debit and credit:

• Salary A/c is an expense — expenses are debited when incurred, so Salary A/c Dr. ₹3,000.
• Payment is by cheque, so the money leaves the bank, not the cash box. Bank A/c is an asset; an asset that decreases is credited, so To Bank A/c ₹3,000.

Journal entry:

Cash A/c is not affected because payment was by cheque, so option (a) Bank A/c is credited.