wages 1k paid in cash:
debit
wages a/c
credit
cash/bank a/c
using A.L.I.C.E rule for the debit and credit system.
A - Asset, Dr (Up/Increase) Cr
(Down/Decrease)
L - Liability, Dr (Down), Cr (Up)
I - Income, Dr (Down), Cr (Up)
C - Capital, Dr (Down), Cr (Up)
E - Expense, Dr (Up) Cr (Down)
(Debit and Credit is not OUT or IN)
ie: You paid your electricity bill 1k via GIRO.
Electricity = Expense. Hence, Expense increased.
GIRO payment = Bank decrease(down), so Dr your bank.
I believe whoever studied POA understand 1 Dr , there will be
another Cr. -.-
You mentioned working capital. ( Current Assets - Current
Liabilities )
So, you paid 1K for wages, your current asset (bank decrease) is
lower than before.
Hence lesser working capital ? er, i dont think any describe it
this way.
Capital employed is basically the long term funds employed in a
business. Doesnt affect ? Only thing affected is Current asset and
your Expense.
Hope this explain to your question.