Rules of Accounting

                                                                Rules of Accounting.

Personal Accounting:

                                 Debit the receiver(who get benefit)

                                 Credit the giver   (of benefit)

                                                                      Natural-Artificial:X A/C,Y A/C,SF CO A/C etc..

                                                                      Representative: Wages outstanding A/C, Prepaid Insu A/C

Real Accounts:

                                 Debit what comes in

                                 Credit what goes out

                                                                       Tangible:Plant A/C, Building A/C

                                                                       Intangible:Goodwill A/C, Copy Rights A/C

Nominal Accounts:

                                  Debit all expenses and losses

                                 Credit all incomes and gains
                                                                     Expenses : Purchase A/C, Wages A/C
                                                                     Losses     : Loss by Fire A/C
                                                                     Profit and Gains : Profit on sale of Assets A/C

Kinds of Accounts/Elements of Accounting

• Assets: it includes - Cash,Bank(dr.),Debtors,Stock,Bills Receivable,Prepaid Expenses,Accrued Incomes,Land & Building,Plant and Machinery,Furniture and fittings,Equipments,Tools,Goodwill,Copy Rights,Patent Rights,Advances etc...
• Liabilities it includes - Creditors, Bills Payable, Borrowings, Bank Loan, Outstanding Exp, Debentures, Overdraft etc..
• Capital it includes - Capital Account and Drawings Account.
• Revenue it includes - Bad debts recovered, Interest Received, Commission Received, Sales, Rent Received, Dividend received etc...
• Expenses and Losses it includes - Exp and Losses ,Salaries, Wages, Carriage, Postage, Stationery, Advertisement, Rent, Bad debts, Purchases, Loss on sale of assets, Loss by theft etc..