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Preparatory 2
Preparatory 2
R F OLI O
F.:- L EDGE
: - L.
Note
F OLIO
L
RNA
= JOU
F.
e :- J .
Not
March 11, 2021 Preparatory Session 26
Double Entry Accounting System
• In double entry book keeping system every transaction is
noted at twice i.e.
– at two different accounts
– at two different sides
– But with equal amount
So we can say that, “Every Debit There is Corresponding
Credit”.
• Every transaction has two effects just as there are two parties
to every transaction, for e.g. buyer and seller, receiver and
giver, debtor and creditor.
March 11, 2021 Preparatory Session 27
Implied Rules of Account
Business and Businessman are separate from each
other, just like two friends are different from each
other.
Hence, no businessman can write his/her own
name into business books of accounts.
Both the rules are personal and nominal account
are not applicable in single transaction at a time.
March 11, 2021 Preparatory Session 28
Implied Rules of Account
• Personal account rules are applicable only when there is
obligations in the transaction for e.g., purchase or sale of
goods on credit.
• Rule of real account can be applicable in same transaction
simultaneously.
• Assets and expenses account always show the debit balance.