Golden Rules of Accounting
Debit the receiver, credit the giver.
Debit what comes in, credit what goes out
Debit all expenses and losses and credit all incomes and gains- Accounts:
- personal
- impersonal
- impersonal: Real or property
- Nominal.
- bank name, Personal name, firm name etc;
- cub. Sri Ram/ Mac Donald
- Real or property
Cash, equipment. furniture and fittings. goods. - Nominal: EXPENSES AND LOSSES.
- rent. Elec bill. maintenance. depreciation
- running expenses discount given, commission given
- GAINS AND PROFITS AND GAINS
- Discount recd. commission recd.etc
- Started business with capital.
- Doll.100,000/
- Transaction two fold effect:
- Receiving and giving
- applying the rule
- Debit what comes in
- Dollars >cash/ doll.100,000
- company/firm different from the proprietor
- Credit
- Capital account Doll.100.000
- Cash a/c Dr.100,000
- To capital account 100,000
- Being cap. brought in
- Purchased 100 toys each Rs 25 by cash
- R and P
- Goods purchased(toys) Dr, 2500/
- To cash 2500/
- Sold 50 toys each at Rs.35 for cash
- Cash Dr. 3500
- By goods(toys) Dr. 3500/
- Rent in advance Rs/2500/ by cash
- RENT ADVANCE Rs. 2500/
- by cash 2500/
- Rent paid doll 500
- Rent Dr.500
- To cash 500/
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- Discount recd. Rs. 500/-
- Cash dr. 500
- To discount 500
- discount given Rs. 250/
- discount dr. 250
- To cash 250/
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- Put the golden rules of accounting down
- 2. Simple scenario of premium and someone insured
- 3. How is settlement done
- 4. how someone takes up added insurance
- 5. how does the reinsurance work
- 6. What do discount rates do?
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