Opening Entry :

Opening Entry is an entry which is passed in the beginning of each current year to record the closing balance of assets and liabilities of the previous year. In this entry asset accounts are debited and liabilities and capital account are credited. If capital is not given in the question, it will be found out by deducting total of liabilities from total of assets.

Example : The following balances appeared in the books of Malarkodi as on 1st January 2004 – Cash Rs. 7,000, Bank Rs.70,000, Stock Rs.80,000, Furniture Rs.10,000, Computer Rs.50,000, Debtors Rs.33,000 and Creditors Rs.90,000.

The opening entry is

Journal

Date	Particulars	L.F	Debit Rs.      P.		Credit Rs.      P.
2004             Jan 1	Cash A/c                                                                                      Dr.		7,000	—
	Bank A/c                                                                                     Dr.		70,000	—
	Stock A/c                                                                                    Dr.		80,000	—
	Debtors A/c                                                                               Dr.		33,000	—
	Furniture A/c                                                                            Dr.		10,000	—
	Computer A/c                                                                           Dr.		50,000	—
	To Creditors A/c				90,000	—
	To Capital A/c  (Balacing figure)				1,60,000	—
	(Assets and liabilities brought forward)