accounts?

[tayabat]

hw to write accounts? tips plz.

 

[Dr Srinivas A]

hw to write accounts? tips plz.

Accounts are statements in the Ledger accounts which records the transaction relevant to a person, asset or income named in the heading.
accounts will be prepared based on ground rules of debit and credit.

Modern classification of accounts :

Accounts -----> assets, liabilities, capital, income, expenses and drawings

RULES OF DEBIT AND CREDIT ALLOCATION IN THE ACCOUNTS :

ACCOUNT ---------- INCREASES ----------- DECREASES
1. ASSETS ---------- DEBIT -----------CREDIT
2. LIBAILITIES----- CREDIT ----------------DEBIT
3. CAPITAL ----------CREDIT ---------------DEBIT
4. INCOME (SALES)- CREDIT --------------DEBIT
5. EXPENSES ---------- DEBIT ---------------CREDIT
6. DRAWINGS -----------DEBIT ---------------CREDIT

EXAMPLE :

1. CASH SALES

CASH IS AN ASSET - ITS INCREASED IN THE BUSINESS - GIVE DEBIT
SALES IS AN INCOME - ITS INCREASED IN THE BUSINESS - GIVE CREDIT

JOURNAL ENTRY :

CASH Dr.
SALES Cr.


2. Furniture sold to Mr X for Cash $ 1000

Furniture - asset - decreased in the business - credit
Cash - asset - increased in the business - debit

journal entry : Cash Dr. 1000
Furniture Cr. 1000

Cash account : debit side furniture 1000 will be written
and
Furniture account : credit side Cash 1000 will be written

Duality aspect / rule : Every debit entry will have corresponding credit entry.

Have a good day !