Dear CA Aspirants,
Welcome to our CA Practice Session.
We will learn Accounting, Taxation, Law, Auditing, Costing, and other CA subjects step by step through simple lessons, practical examples, and regular exercises.
Our objective is to build strong conceptual knowledge and exam confidence together.
Let us begin our journey towards becoming successful Chartered Accountants.
— Vedanthi Pandey
CA Practice Session – 1
Topic: Basic Accounting Equation
Problem:
Mr. Ravi started a business with cash of ₹50,000.
After starting the business, he purchased furniture for ₹10,000 in cash.
Find the effect on the Accounting Equation:
Assets = Liabilities + Capital
Solution:
Step 1: When business started with cash
Cash introduced by owner = ₹50,000
So,
Assets = ₹50,000
Capital = ₹50,000
Accounting Equation:
Assets = Liabilities + Capital
₹50,000 = ₹0 + ₹50,000
Step 2: Purchased furniture for cash
Furniture purchased = ₹10,000
Cash reduced = ₹10,000
Now:
Cash = ₹40,000
Furniture = ₹10,000
Total Assets = ₹40,000 + ₹10,000 = ₹50,000
Capital remains ₹50,000.
Final Accounting Equation:
Assets = Liabilities + Capital
₹50,000 = ₹0 + ₹50,000
Conclusion:
There is no change in total assets.
Only the form of asset changed from cash to furniture.
Cash decreased and furniture increased.
— Vedanthi Pandey
CA Practice Session – 2
Topic: Introduction to Journal Entries
What is a Journal?
A Journal is the book of original entry where all business transactions are recorded for the first time in chronological order.
Before preparing Ledgers, Trial Balance, or Final Accounts, every transaction must be entered in the Journal.
Golden Rule
For every transaction:
Debit what comes in.
Credit what goes out.
Problem
Mr. Ravi started a business with cash of ₹1,00,000.
How should this transaction be recorded in the Journal?
Analysis
Cash is coming into the business.
The owner is providing capital to the business.
Therefore:
Cash Account = Debit
Capital Account = Credit
Journal Entry
Cash A/c Dr. ₹1,00,000
To Capital A/c ₹1,00,000
(Being capital introduced into business)
Explanation
The business receives cash, so Cash Account is debited.
The owner’s capital increases, so Capital Account is credited.
Question for Practice
Mr. Ravi purchased furniture for ₹20,000 in cash.
Identify:
- Which account should be debited?
- Which account should be credited?
- Prepare the Journal Entry.