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1

How should I set the initial capital?

By
Max
on 2/14/13, 7:25 AM 4,740 views

I can't find a right way to setup the initial capital.

For example: I'm creating a new company with a initial capital of USD 10000. Is creating an "Initial Capital" account, credit from it and debit into "Bank" account the right way? If YES, what is the "Internal type" shall the "Initial Capital" be categories? View? Receivable? Regular? or etc.. and what is the "Account Type" shall it to be categories? Asset? Bank? Current Liabilities? or etc..

5

Cameron

--Cameron--
769
| 6 5 8
United Kingdom
--Cameron--
Cameron
On 2/14/13, 8:56 AM

I'm a NONE Accountant trying to answer an Accounting Question.

I had the same issue! but my problem wasn't knowing where to put it! but why!

I didn't and still don't fully understand Double Entry Book keeping, which is the heart of OpenERP accounts

Understand DEBK and you will know (at least hopefully know what you want to achieve) where/which Journal to enter it! and which account to post it to! - that along with which set of accounts to install!

My answer was spend a few days on youtube!

Apologies if I've gone of at a wrong tangent!

Not an answer. Comments can be added below the question. See the FAQ.

Daniel Reis
on 2/14/13, 10:44 AM

Sorry but I disagree! If you understand the basic rules of credit & debit of a DEBK system then it becomes self explanatory where you post items, you will also understand purpose of journals & accounts.This will allow you to choose and design and use an appropriate chart of accounts. Get on youtube!

Cameron
on 2/14/13, 1:45 PM

The universal accounting entry for recognizing the capital is debit the bank account and credit the capital account. The capital (plus debts, previous results, reserves etc;) are the financial resources of the cy; the counterpart (fixed assets, inventory, bank etc are the way you use the resources.

AD LIBITOM, michel Guénard
on 2/14/13, 7:43 PM

Nobody said it wasn't! - Even if you check out Youtube! - it will agree!

Cameron
on 2/15/13, 12:38 PM
1

ton123

--ton123--
1418
| 5 6 9
Lisse, Netherlands
--ton123--
End-User. Installed 6.1.1 on a DS412+, DS211+ and DS113J Synology NAS. Reference installation on Ubuntu 12.04/Samsung Notebook. 12-03-2013 In production for Suppliers and Customers, adresbook. 7 small companies. Testing accounting, document management, import and export. Too much showstoppers I haven't fixed at this moment. 06-05-2013 little progress. Migration to v7 impossible because of missing Dutch localisation modules. What I see working is nice, so further testing and asking. Start testing products and warehouse. Happy with this forum and the community.
ton123
On 2/14/13, 10:34 AM

It is not clear for me if you have gone through the setup proces for accounting. There is a wizard available for this setup. Make sure you have set up with the right accounting charts for your country. This will help a lot. If your country chart is not available use the standard chart. You need also to setup year fiscal year and period.

If you have done this all then go to accounting/journal items. And use the journal "Opening Entries".

I'm in Malaysia and I've install UK-Accounting charts because our country are member of British Commonwealth, so I believe this is the right one to use.

Yes, i have gone through fiscal year and period setup.

Can you post a screen shot of your Accounting/Journal?

Thanks.

Max
on 2/15/13, 12:53 AM
1
Jānis
On 2/15/13, 6:15 AM
  1. | Is creating an "Initial Capital" account, credit from it and debit into "Bank" account the right way? | - yes. Debit could be also another account (country and company specific), but the main thing that credit is "Initial Capital" (or "Share Capital").
  2. | If YES, what is the "Internal type" shall the "Initial Capital" be categories? | - all accounts need Internal Type. For Initial Capital it's Regular.
  3. | what is the "Account Type" shall it to be categories? Asset? Bank? Current Liabilities? | - all accounts need Account Type. Account Types are country specific, but if you are using UK account chart, then Account Type for Initial Capital could be Equity.
0
Mario Arias Badila
On 2/14/13, 11:47 AM

As Ton123 pointed out, you first need to define your chart of accounts. This is VERY country specific, so you better look for help from some accountant in your country if the chart is not available on OpenERP...

Once your chart is in place, you need to create what is called an "opening entry" that sums up the current state of your company at the moment you started using OpenERP: your capital, accounts payable and receivable, ...

Again, for that you better request advice from your accountant...

Initial setup is THE MOST important part using any ERP system, so you better do it right from the beginning, or you will suffer a lot latter...

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Asked: 2/14/13, 7:25 AM
Seen: 4740 times
Last updated: 3/16/15, 8:10 AM