CONCEPT OF ACCOUNTING

 Real account e.g.: cash book

 Personal account e.g.: name of persons
Name of banks

Name of companies

 Nominal account e.g.: all expenses and incomes

Golden rules

1. Real account
 Debit : what comes in.
 Credit: what goes out.
E.g.: received cash towards capital.

2. In personal account
 Debit : the receiver.
 Credit: the giver.
E.g.: paid cash to balaji.

3. In nominal account
 Debit: all expenses and losses.
 Credit: all incomes and gains.
E.g.: paid salary by cash.
1.Ram Capital the giver cr

Cashwhat comes in.  dr

2.Cash what goes outcr

Iob bank the receiverdr

3.(credit purchase) all exp and lossesdr

Krishna tradersgivercr

4. purchase returnall income and gainscr

Krishna traders The receiverdr

5.credit salesall incomes and gainscr

Ravi&coreceiverdr

6. cashwhat comes inddr

Cash salesall incomes and gainscr

7.sales returnall exp and lossesdr

Ravi&cothe givercr

8.iob bankthe givercr

Krishna tradersthe receiverdr

9.iob bankthe receiverdr

Ravi&cothe givercr

10.cashwhat goes outcr

Petty cashwhat comes indr

11.furniturewhat comes indr

Cashwhat goes outcr

12.salaryall exp and lossessdr

Cashwhat goes outcr

13.cashwhat goes outcr

Cash purchaseall exp and lossessdr

14.conveyanceall exp and lossess ==> dr

Petty cashwhat goes outcr

15. stationriesall exp and lossessdr

Sri ram&cothe giver cr

16. Depreciationall exp and lossessdr

Furniturewhat goes outcr

Purchase return
Cr (purchase return)
Date Inv.no Parties name Amount
(Dr)
10.4.200 12 Krishna traders 5,000
7
12.4.200 44 Pravin traders 5,000
7

Credit sales
Cr (credit sales)
Date Inv.no Parties name Amount
Dr
15.4.200 1 Ravi & co 50,000
7
15.4.200 2 Kumar & co 50,000
7

Cash sales
Dr (cash) cr (cash sales)
Date Inv.no Parties name Amount
15.4.200 3 ---------------- 20,000
7

Credit sales
Cr (credit sales)
Date inv.no Parties name Amount
Dr
 17.4.200 4 Ravi & co 50,000
7
17.4.200 5 Kumar & co 50,000
7

Sales return
Date Inv.no Parties name Amount
17.4.200 1 Ravi & co 5,000
7
17.4.200 5 Kumar & co 5,000
7

Payment made by cheque

Date Cheque.no Parties name Amount
20.04.200 153154 Krishna traders 30,000
7
20.04.200 153155 Pravin traders 30,000
7

Received cheque from

Date Ch.no Parties name Amount
23.4.200 302302 Ravi & co 75,000
7
23.4.200 116210 Kumar & co 75,000
7

Payment made by cash

Cr(cash)
Date Expenses Amount
25.4.0 Paid to petty cash 1,000
7
25.4.0 Paid to furniture 20,000
7
25.4.0 Salaries 10,000
7
25.4.0 Rent 4,000
7
25.4.0 E.b charges 3,000
7
25.4.0 Telephone charges 3,500
7
25.4.0 Cash purchase 5,000
7
 Payment made by petty cash
Date Expenses Amount
30.04.200 Conveyanse 150
7
30.04.200 Postage 100
7
30.04.200 Stationeries 200
7
30.04.200 Staff welfare 100
7

Journal

30.04.2001

stationeries purchase from sriram & co for rs 1500/- credit.

Depreciation on furniture 10%.

Balance sheet: 3, 21,950.00