Quick Reference Guide - Capital Investment in Cash by the Proprietor

Now let's come to discuss on the affected Ledger Accounts/Books of Account and Accounting Reports/Statements for Capital Investment in Cash by the Proprietor/Owner of a Sole Proprietorship Business.

Affected Ledger Accounts :

  • Cash A/c - Debit

  • Proprietor's Capital A/c - Credit

Journal Entry :

Capital Investment by cash by the Proprietor - Journal Entry

Ledger Posting :

  • Cash A/c - Debit column.

Capital Investment by Proprietor(in Cash) - Cash Ledger
  • Proprietor's Capital A/c - Credit column.

'Capital A/c' can be mentioned in place of Proprietor's Capital A/c

Capital Investment by Proprietor(in Cash) - Proprietor's Capital Ledger
Trial Balance :

  • Cash A/c - Debit column of Trial Balance.

    Debit column of Trial Balance(Cash A/c) will be increased by the transaction amount.

  • Proprietor's Capital A/c - Credit column of Trial Balance.

    Credit column of Trial Balance(Proprietor's Capital A/c) will be increased by the transaction amount.

Capital investment by the Proprietor in Cash - effect on Trial Balance
Profit & Loss Account :

  • No effect on Profit & Loss Account.

Balance Sheet :

  • Cash A/c - under Current Assets in Assets side of Balance Sheet. 

    Cash A/c under Current Assets will be increased by the transaction amount.

  • Proprietor's Capital A/c - under Capital Account in Liabilities side of Balance Sheet.

    Proprietor's Capital A/c under Capital Account will be increased by the transaction amount.

Capital investment in cash by the Proprietor - effect on Balance Sheet
Location: Cuttack, Odisha, India

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