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Hi,
In example 1 in Chapter 3 of the F3 course notes, we are told kristine adds $5,000 of capital to the business at the outset. In the T-accounts this capital appears to be added to the Debit side of the Cash A/C and the Credit side of the Capital A/C.
Could you explain how this corresponds with the general rules of double entry. i.e items added to the Debit side are increase in asset, decrease in liability or expense.
I cant work out why the item of Capital is added to the debit side of the cash a/c as I thought capital was classed as a liability and an “Increase in Liability” should be recorded on the credit side as per rules of double entry.
Thanks,
Ciaran
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