After closing all the books at the end of a financial year, each company starts its new books at the beginning of each year. The closing balances of all accounts are carried over to the new year as opening balances. Since this is the first entry in the new financial year, it is called an entry in the opening journal. The journal entry is recorded at the beginning of an accounting period to open the account books. It allows you to obtain the balances of the accounts in the general ledger and is called an opening entry.
The opening entry for the general ledger account is based on the initial balance sheet. When a company starts the books for a new year, it has to do what is known as the initial entry in the journal. It consists of recording the starting balances of several accounts that are being transferred from the previous year's books to the New Year's books. All accounts that indicate what the company owns (assets) are debited and all accounts that show the amounts owed by the company (liabilities) are credited. If the capital (the amount owed by the company to the owner) is delivered, fine, but if it isn't, it can be easily found out by deducting liabilities from assets.
It will also be credited to the capital account...
