Commerce Exam > Commerce Questions > The amount brought into the business by the p...
Start Learning for Free
The amount brought into the business by the proprietor should be credited to
- a)Cash account
- b)Capital account
- c)Drawings account
- d)Suspense account
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
The amount brought into the business by the proprietor should be credi...
The proprietor contributes capital to the business at the time of its commencement and also at any later stage. Capital is the amount invested by the proprietor in the business. When the proprietor brings in the capital, it is recorded in the books of accounts by making the following journal entry:
Capital A/c Dr.
To Cash A/c
Explanation:
• The capital account is debited because the proprietor brings in capital to the business.
• The cash account is credited because cash is received from the proprietor.
Therefore, the amount brought into the business by the proprietor should be credited to the capital account. This will increase the proprietor's capital in the business.
Option 'A' is incorrect because the cash account is debited when cash is received, not credited.
Option 'C' is incorrect because the drawings account is used to record withdrawals made by the proprietor from the business, not contributions made by the proprietor.
Option 'D' is incorrect because the suspense account is used to temporarily record transactions when there is uncertainty about which account to debit or credit. It is not used to record capital contributions.
Hence, option 'B' is the correct answer.
Capital A/c Dr.
To Cash A/c
Explanation:
• The capital account is debited because the proprietor brings in capital to the business.
• The cash account is credited because cash is received from the proprietor.
Therefore, the amount brought into the business by the proprietor should be credited to the capital account. This will increase the proprietor's capital in the business.
Option 'A' is incorrect because the cash account is debited when cash is received, not credited.
Option 'C' is incorrect because the drawings account is used to record withdrawals made by the proprietor from the business, not contributions made by the proprietor.
Option 'D' is incorrect because the suspense account is used to temporarily record transactions when there is uncertainty about which account to debit or credit. It is not used to record capital contributions.
Hence, option 'B' is the correct answer.
Free Test
FREE
| Start Free Test |
Community Answer
The amount brought into the business by the proprietor should be credi...
Separate entity concept defines that the business and its owner are treated two separate legal entities. Owner is considered as a creditor in the books of accounts of business. Amount contributed by the owner is a liability, and it is to be credited to capital account.
The accounting entry will be as under:
Cash A/c Dr.
To Capital A/c
hope it will help you
The accounting entry will be as under:
Cash A/c Dr.
To Capital A/c
hope it will help you
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Similar Commerce Doubts
Top Courses for CommerceView all
The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer?
Question Description
The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer?.
The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer?.
Solutions for The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice The amount brought into the business by the proprietor should be credited toa)Cash accountb)Capital accountc)Drawings accountd)Suspense accountCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup