Business started with capital rs 600000 . 2. 450000 diposite into bank?

Question

Answer

Overview

Starting a business requires an initial investment of capital to cover various expenses such as equipment, supplies, and marketing. In this scenario, the business had an initial capital of Rs 600,000 and deposited Rs 450,000 into a bank account. Let's explore the reasons behind this decision and the potential benefits of depositing such a large amount.

Reasons for Deposit

Security: Depositing money into a bank account provides a higher level of security than keeping cash on hand. Banks have security measures in place to protect deposited funds from theft or loss.

Interest: Banks offer interest on deposits, which means that the business can earn additional income by depositing money into a savings or fixed deposit account.

Convenience: Keeping money in a bank account makes it easier to manage and track business finances. Transactions can be easily recorded, and bank statements provide a clear overview of all transactions.

Borrowing: Having a healthy bank balance can make it easier for the business to secure loans or lines of credit in the future. Banks are more likely to lend money to businesses that have a solid financial track record.

Benefits of Deposit

Earning interest: By depositing Rs 450,000 into a savings or fixed deposit account, the business can earn interest on this amount. This can provide a steady stream of additional income without requiring any additional effort on the part of the business.

Improved creditworthiness: Depositing money into a bank account can improve the business's creditworthiness, making it easier to secure loans or lines of credit in the future. Banks are more likely to lend money to businesses that have a strong financial track record.

Reduced risk: Keeping large amounts of cash on hand can be risky, as it can be lost or stolen. Depositing money into a bank account provides a higher level of security and reduces the risk of loss or theft.

Improved financial management: Depositing money into a bank account makes it easier to manage and track business finances. Transactions can be easily recorded, and bank statements provide a clear overview of all transactions.

Conclusion

Depositing Rs 450,000 into a bank account can provide numerous benefits for a business. It can improve creditworthiness, reduce risk, and provide a steady stream of additional income through interest. Additionally, it makes financial management easier and more convenient. Overall, depositing money into a bank account is a smart financial decision for any business.

Answer

Cash A/c 600000 (Dr)
To Capital A/c 600000(Cr)
( B/s started with cash)
Bank A/c 450000 (Dr)
To cash A/c 450000(Cr)
( cash deposite into bank)

Answer

Cash a/c Dr 600000
To capital a/c 600000
(being amount during the commencement of the business)
bank a/c Dr 450000
To cash a/c 450000
(being amount deposited into bank )

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