Double Entry System

The Golden Rules for “Double Entry System”

1. Personal Account
Debit the receiver or “Who will pay to business”
Credit the Giver or “Business will pay to him”
2. Real Account
Debit what comes into Business
Credit what goes out from Business
3. Nominal Account
Debit all expenses or losses
Credit all income or gains
1. Mr. Vikas started a business and invested Rs. 500000
into the business. He bring Rs. 500000 cash as capital.

Cash A/c Dr 5,00,000

Capital A/c Cr 5,00,00

Cash A/c (Real Account)

Capital A/c (Personal Account)
2. He bought office furniture for Rs. 25,000 for cash
Furniture A/c (Real a/c) Dr 25,000
Cash A/c (Real A/c) Cr 25,000

3. He open current account in ICICI Bank by

depositing Rs. 100,000
Bank A/c (Real a/c) Dr 1,00,000
Cash A/c (Real A/c) Cr 1,00,000
4. He paid office rent of Rs. 15,000 for the month by
cheque to M/s Realtors Properties

Rent Expenses A/c (Nominal a/c) Dr 15,000

Realtors Properties (Personal) Cr 15,000
(at the time of booking of expenses)

Realtors Properties (Personal) Dr 15,000

ICICI Bank (Real a/c) Cr 15,000
(at the time of Payment)
5. He made purchase for Rs. 100000 on credit
from Xpert Shoe Company.
 Purchase A/c (Real a/c) Dr 1,00,000
 Xpert Shoe Company (Personal A/c) Cr 1,00,000

6. He paid Rs. 50,000 to Xpert Shoes Company

by Cheque.
 Xpert Shoes Company - (Personal a/c) - Dr 50,000
 ICICI Bank - (Real A/c) - Cr 50,000
7. He made sales to Anubhav Traders on credit
for Rs. 25,000.
Anubhav Traders - (Personal a/c) - Dr 25,000
Sales A/c -(Real A/c) - Cr 25,000

8. He made cash sales for Rs. 20,000

Cash A/c - (Real a/c) -Dr 20,000

Sales A/c - (Real A/c) -Cr 20,000
 9. He received cheque of Rs. 25,000 against Sales
made to Anubhav Traders
ICICI Bank A/c - (Real a/c) - Dr 25,000
Anubhav Traders - (Personal A/c) - Cr 25,000

10. Godown Rent is due but not yet paid for Rs. 25,000
Godown Rent Exp A/c (Nominal A/c) -Dr 25,000
Rent Payable (Nominal A/c) -Cr 25,000