Unit-5 Journal

This unit explains the method of applying the rules of debit and credit to business transactions and how exactly the entries are made.

What is an opening entry? Show how it is recorded. 

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Learning Pundits Content Team

Written on Apr 17, 2019 5:26:39 PM

When a new accounting year begins, the previous year's balances in different accounts are brought forward to the new books of accounts.

This is done by means of a journal entry called 'opening entry'. In this entry all assets accounts are debited and liabilities accounts (including owner's capital account) are credited.

If, however, capital account balance is not given, it can be worked out by deducting other liabilities from the total assets.


Mr. Avinash has the following balances of assets and liabilities on December 31, 1986.

Cash in hand Rs. 2,500 Stock of goods Rs. 22,500

Furniture Rs. 5,000 Bank Loan Rs. 10,000

Pass the opening entry on January 1, 1987.

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