ACCOUNTINGDOSE

Hi , this is continuation of part- 1 of passing journal entries by understanding three golden accounting principles Click here for part- 1 Entry 1: Salary payable Rs. 15000/- is paid SL.NO PARTICULAR DEBIT CREDIT 1 Salary payable A/c      Dr             To cash  A/c 15000 15000                    (Being salary for the previous month is payable is paid) Rule for passing entry On business side: - The salary payable is settled by paying and cash is going out of business. Debit Salary payable is representative person. The personal account rule is applicable:- Debit the receiver account, here salary payable is treated as representative person because it represents salary of many persons. So, it is debited. Credit Cash is treated as asset. The real account rule is ...

Here we are going to learn how to pass journal entries by understanding three golden principles. Let us begin with introduction of business. Business is treated as separate entity so, while passing the journal entry you should treat it as artificial person. some simple techniques are sufficient to pass entry. Here you have to assume you as business that’s it. Entry 1:- Cash Bought into business of Rs.100000/- by raj SL.NO PARTICULAR DEBIT CREDIT 1 Cash A/c      Dr          To Raj capital  A/c 100000 100000 (Being Capital introduced into business) Rule for passing entry On business side:- It is receiving cash and liable to pay back to the person who invested. Debit Cash is treated as asset. The real account rule is applicable:-Debit what comes into business, here cash is coming into business.So, it is debit...

THREE  GOLDEN ACCOUNTING PRINCIPLES We have seen that an account may be related to a person or thing(Tangible or Intangible). While doing business transactions, one may come across numerous accounts that are affected. One has to decide about the accounting treatment for each of the account. The accounts are classified depending on their characteristics.

Accounting is art of recording, Classifying and summarizing of transaction in money or money's worth. STEPS IN ACCOUNTING :-