Three Type of Accounts

(1) Personal Account (Natural or artificial person)(2) Real Account(Assets like Cash ,bank, gold, share, F.D)(3) Nominal Account(Expense, Income)

Balance Sheet is a statement of assets and liabilities as on a particular date i.e. as on 31-3-YYYY

Trading and Profit and Loss Account is prepared to know the results of business operations undertaken from 1-4-YYYY to 31-3-YYYY i.e. either profit or loss

Accountancy is done in BOOKS OF BUSINESS

Golden Rules for 3 types of accounts:

(1) PERSONAL Accounts:Debit the receiver and credit the giver

(2) REAL Account:Debit what comes in Credit what goes out

(3) NOMINAL A/cDebit the expenses/lossCredit the income/gain/profit

(1) Business has taken loan of Rs.40000 by cash from Mr.SatishCash A/c(REAL, Debit what comes in) DR.40000

To Satish a/c(PERSONAL, credit the giver) 40000(2) Cash deposited into bank Rs.10000

Bank A/c(REAL, Debit what comes in) 10000To Cash A/c(REAL, Credit what goes out) 10000

(3) Interest income of Rs.800 on fixed deposit received by cheque.Bank A/c(REAL, Debit what comes in)Interest received a/c(NOMINAL, Credit the income)

(4) Invested in Kotak Fixed deposit by issuing a cheque of Rs.50000

Kotak Fixed Deposit A/c(REAL, Debit what comes in) 50000

TO Bank A/c(REAL, Credit what goes out) 50000

(5) Rent received by cash of Rs.8000

Cash A/c(REAL, Debit what comes in) DR. 8000

TO Rent received a/c(NOMINAL, Credit the income) 8000

(1) What is the golden rule for PERSONAL A/C???????

Debit the receiver

Credit the giver

(2) What is the golden rule for NOMINAL A/C???????

Debit the expenses/losses

Credit the income/profit/gain

(3) Interest Earned on State Bank of India fixed deposit Account is __NOMINAL__ type of account??????

(4) State Bank Of India Fixed Deposit Account is __REAL_____ type of account

Convert the following business events/transactions into JOURNAL entries in the books of business.

(1) Business given a loan to Mr.Ramesh by cash of Rs.7000

Ramesh A/c(PERSONAL, Dr. the receiver) DR.7000

TO Cash a/c(REAL, Cr. what goes out) 7000

(2) Cash deposited into bank Rs.7000

Bank a/c(REAL, Dr. what comes in) DR.7000

TO Cash a/c(REAL, Cr. what goes out) 7000

(3) Cash withdrawn from bank Rs.6000

Cash a/c(REAL, Dr. what comes in) DR.6000

TO Bank a/c(REAL, Cr. what goes out) 6000

(4) Purchased building worth Rs.3,00000 by cheque.

Building A/c (REAL, Dr. what comes in) DR.300000

TO Bank A/c(REAL, Cr. what goes out) 300000

(5) Invested in ICICI Prudential Mutual Fund by issuing a cheque of Rs.100000

ICICI Prudential Mutual fund a/c (REAL) DR.100000

TO Bank A/c(REAL, Cr. what goes out) 100000

(6) Received dividend income of Rs.12000 on ICICI Prudential Mutual Fund, by cheque.

Bank A/c(REAL, Dr. what comes in) DR.12000

TO Dividend on ICICI M.F A/c(NOMINAL, Cr. the income)

Please enter JOURNALS for the following business transactions in the books of business

(1) Taken a loan of Rs.10000 by cheque from Mr.A

Bank A/c(REAL, Dr. what comes in) DR.10000

TO Mr.A a/c(PERSONAL, Cr. the (LOAN) giver) 10000

(2) Given a loan of Rs.20000 to Mr.B by cash

Mr.B a/c(PERSONAL, Dr. the (LOAN) receiver) DR.20000

TO Cash a/c(REAL, Cr. what goes out)

(3) Two-wheeler has been sold to Mr.C by cash of Rs.9000

Cash A/c(REAL, Dr. what comes in) Rs.9000

TO Two-wheeler a/c(REAL, Cr. what goes out) 9000

(NOTE: Mr.C is neither LOAN giver nor LOAN receiver)

(4) Furniture has been purchased from Mr.D worth Rs.13000 on credit

Furniture A/c(REAL, Dr. what comes in) DR.13000

TO Mr.D a/c(PERSONAL, Cr. the (LOAN) giver) 13000

(5) Four-wheeler has been purchased from Mr.E on credit worth Rs.300000

Four-wheeler A/c(REAL, Dr. what comes in) DR.300000

TO Mr.D a/c(PERSONAL, Cr. the (LOAN) giver) 300000