Why: When a business is started by contributing assets, all assets brought in are debited to their respective accounts as they represent the resources owned by the business, and the proprietor's capital account is credited with the total value of assets contributed. This follows the double-entry principle where assets increase with debit. Here, cash, furniture, and building are recorded at their given values totaling ₹13,00,000, establishing the initial capital base.

This entry is chronological and provides a complete picture of the transaction as per journal rules.

Why: A journal is known as the book of original entry where financial transactions are recorded chronologically as they occur, providing date-wise records with complete details of each transaction under the double-entry system. The total debits always equal credits in journal entries. This distinguishes it from ledgers (which classify transactions by account) or other tools like financial statements (prepared later from trial balance). Option A matches this definition precisely.

Why: **Introduction:** Journal records transactions chronologically, while ledger classifies them into accounts for balances. This maintains systematic accounting flow from journal to ledger.

**1. Business Commencement:** Capital introduced increases assets (cash) and owner's equity. Debit Cash, credit Capital per asset increase rule.

**2. Purchase Transaction:** Goods list price Rs.50,000. Trade discount 20%: 50,000 × 20% = 10,000; net cost 40,000 (recorded in Purchases). Cash discount 5% on net: 40,000 × 5% = 2,000. Cash paid: 38,000. Debit Purchases 40,000 (cost of goods), credit Cash 38,000 and Discount Received 2,000 (income).

**Ledger Posting:** Transactions posted to T-accounts: Cash debited 1,00,000 then credited 38,000, balance Dr. 62,000; Capital Cr. 1,00,000; Purchases Dr. 40,000; Discount Recd. Cr. 2,000.

**Example Application:** Ensures accurate inventory valuation (net of trade disc only) and recognizes cash discount as income separately.

**Conclusion:** Proper journalisation and ledger posting facilitate trial balance preparation and error detection, forming the foundation of financial statements.

Why: Supplier invoices represent credit purchases and are recorded in the Purchase Journal (also called Purchases Day Book), a book of prime entry for purchase transactions on credit. This allows batch posting to ledger accounts efficiently. It differs from Sales Journal (customer invoices), Cash Book (cash transactions), or General Journal (miscellaneous/adjusting entries). Option A is correct as per standard accounting practice.

Why: Journal provides chronological, transaction-wise record for audit trail; Ledger offers account-wise summary for financial position. **Key Differences:** 1. **Order:** Chronological vs. analytical. 2. **Content:** Full narration vs. balances. 3. **Purpose:** Record vs. classify. **Example:** Above entry ensures traceability in journal and balance in ledger for trial balance. This distinction maintains accounting accuracy and supports statement preparation.