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Q. What Is An Account? Give The Meaning of Debit and Credit
Q. What Is An Account? Give The Meaning of Debit and Credit
: PRINCIPLES OF ACCOUNTANCY
Types of accounts
Personal
Natural
Artificial
Impersonal
Representative
Real
Tangible
Nominal
Intangible
Impersonal accounts: All those accounts which are not personal accounts.
1. Real accounts: Accounts relating to properties and assets which are owned by the business concern, real
accounts include tangible and intangible accounts. For example: Land, building. Goodwill purchases etc.
2. Nominal accounts: These accounts do not have any existence, form or shape. They relate to income and
expenses and gains and losses of a business concern. For example: Salary account, dividend account,
commission received, interest received account.
Golden rules of accounting
1. Personal accounts Debit the receiver
Credit the giver
2. Real account Debit what comes in
Credit what goes out
1
3. Nominal account -
Q.WHAT IS JOURNAL?
The term Journal is derived from the French word Jour means day. Journal therefore means a daily
record of business transactions.Journal is the prime book or books or original entry. Because all transactions
are first recorded in the journal. All transactions are entered in the order of their happening. i.e., date wise
(chronological order). Journalizing is an act of recording the debit and credit aspect of a business transaction in
journal. Narration is nothing but a brief explanation which is added after each journal entry.
The ledger folio column is completed when entries are posted to the ledger by entering the page number
of the ledger. Till posting (transferring) to the ledger takes place, the ledger folio column remains blank.
The account to be debited is written first, close to the left line in the particular column and ends with the
abbreviations Dr at the extreme right side of the particular columns.
Against this, the amount is written in the debit column. In the next line, the account to be credited is
written a few spaces away from the margin in the particular column to make it distinct from the debit account;
the credit account starts with the prefix to.
DATE
CREDIT