Opening Journal Entry

After closing all the books at the end of a financial year, every business starts its new books at the beginning of each year. Closing balances of all the accounts are carried forward to the new year as opening balances. As it is the first entry in the new financial year, it is called Opening Journal Entry.

Journal Entry:

Example:

ABC Ltd. has the following balances in their different ledger accounts on 1st April 2022:

• Cash: ₹25,000
• Closing Stock: ₹20,000
• Building: ₹80,000
• Debtors: ₹50,000
• Creditors: ₹40,000

Pass the opening journal entry.

Solution:

 

Note: If the amount of capital is not given in the question, then we can calculate capital as: Capital = Total Assets – Liabilities.