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Something a company own, and which give it benefit and generate revenue for the business is debt. It is considered to be positive. Something which create liability and responsibility on the business is credit. And it is considered to be negative.
In Accounting: Debits represent increases in value of assets and expenses and decreases in income, liabilities and equity Credits represent increases in liabilities, equity and income and decreases in assets and expenses
An element (account) that is effected by an accounting transaction is either debited or credited (with an amount that is reflected in the transaction) depending on the nature of the account and the rule applicable to it.
There are 4 golden rules of debit and credit in accounting. 1. Debit which comes in and credit which goes out. 2. Debit the receiver and credit the giver. 3. Debit all gain/profit and credit all loss/expenses. 4. Debit must be equal to credit.
A decrease is recorded as debit(left side), and a decrease is recorded as credit( right side).
DEBIT + +
CREDIT + + +
In accounting, a "journal" refers to a financial record kept in the form of a book, spreadsheet, or accounting software that contains all the recorded financial transaction information about a business. OR A journal details all the financial transactions of a business and which accounts these transactions affect Typically, journal entries are entered in chronological order
Rs.12000
Rs.12000
2. IMS purchase split on worth Rs. 40,000 and on account payable Rs 20,000.
DATE ENTRY LP DEBIT Rs.40,000 Rs.20,0000 CREDIT
11 MAY, 2012
Rs.20,000
4. IMS purchased a generator worth Rs. 1,50,000. amount paid is Rs. 10,0000 and remaining on account payable.
DATE 15 JUNE, 2011 ENTRY Cash Generator Account payable LP
.
DEBIT
Rs. 1,50,000
Rs.50,000
14 FEB,2012 Merchandise .
Account payable .
$6,000
$6,000
$35,000
$1,500
10. A Honda company purchase mirror glass worth Rs.20,0000 , pay cash of 15,0000 and remaining will be paid next month.
DATE 18 APRIL, 2012 ENTRY Cash Account payable LP . . DEBIT CREDIT Rs. 15,0000 Rs.5,0000
mirror
....
Rs.20,0000
12.
Building land was purchased against Rs. 12,5000. building price is Rs, 75000, land price is Rs. 50,000, cash paid is, Rs 75000, remaining against payable account.
ENTRY LP DEBIT CREDIT
DATE
2 MAY,2012
. . . .
Narration: purchase of building and land cash advance and account payable.
14. A white papers is purchased for office use worth Rs. 2800.
DATE 18 MARCH, 2012 ENTRY Cash paper LP . . Rs. 2800 DEBIT CREDIT Rs. 2800
15. A mill purchased cotton of worth Rs. 50,000. they paid 40,000 cash and remaining against account payable.
DATE 14 JAN,2012 ENTRY Cash Cotton Account payable LP . . . DEBIT Rs. 50,000 Rs.1o,ooo CREDIT Rs.40,000