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In case of Sole Proprietorship or Partnership, A No n Contra Capital Account is used. It is added to Capital Account as it has normal credit balance. Examples are N et Profit / N et Income and Fresh or Further Capital Introduced in the business. The resulted figure of capital account is total capital account before any deduction of Contra Capital Account .

Accounting Adjusting Entries are made at the end of Accounting Period in order to Adjust the balance of Accrual And Deferrals . It is the requirement of Accrual Basis of Accounting and Generally Accepted Accounting Principle Matching Concept that all the Expenses incurred in earning Revenues of the same period must be sett off against the Revenues in order to provide true and fair presentation of Financial Statement to Users of the Financial Statements . For Example, if we Accrued Salaries of employees for the month, then we need to pass adjusting entry to reflect the true picture of our Net I ncome / Net Profit for the period i.e., all the sales made by Sales Ma nager must be sett off against his Salary that is expense for the company. Let’ say that Mr. A is a Sales Manager and the compa n y pays him Rs. 100000 for the month. For the month of October, 2018, his salary is due and payable by the company on 10 th November, 2018, the n, there is need of Adjust...