Clear the logic.........pls...........!!

This is not logic.. This is a Golden rule in Accounting..

Debit what comes in..Purchases - Goods comes in

Another way to look at it is debit all expenses.. when u r purchasing u incur expense

Credit what goes out..Sales -Goods goes out

Likewise Sales means income.. so u credit it..

Its like traffic rules..Ride on the left of the road..

Originally posted by : Jairam J
	This is not logic.. This is a Golden rule in Accounting.. Debit what comes in..Purchases - Goods comes in Another way to look at it is debit all expenses.. when u r purchasing u incur expense Credit what goes out..Sales -Goods goes out Likewise Sales means income.. so u credit it.. Its like traffic rules..Ride on the left of the road..

ok fine....

you giving me the information about the golden rule of accountancy it is applicable on Journal entry question like Purchases goods........Sold goods and so on......

but in case of Trial Balance question not mention as journal entry type......

In trial balance question we have given (nothing mention about DR. or Cr.)

Purchases Rs. 5400

Carriage Rs. 2000

Debtors Rs. 5000

Drawings Rs. 1000 & so on........

Now my question to you in such type of question how we can apply the golden rule of Accountancy

Ok my question to you on this query of yours.What is the meaning of purchases.Dont think of where it is asked. Just literal meaning of Purchases.

there logic for it u should have know it at 11 class itself , no if u dont knwo it then its waste to study commerce and accounts further if i tell u know then it will spoon feeding open the book again and learn why ? how ? what ? all this be know to u 

Logic is here

Debit = Credit

Assets = Liabilities

or Assets = equity+external liabilities

or  Expenses+losses+Assets=Incomes+Gains+Liabilities

Trail balance is based on above equation. Trail balance is a statement which shows balance of different Accounts.

Assets and expenses shown at debit side and liabilities are shown at credit side. If both total does not tally then their is some mistake in ledger accounts.

Or

Purchase a/c shows debit balance so it shown in Dr. side of trail balance and sales a/c shows credit balance so its shown on credit side of trail balance

Same like Cash A/c is shown at debit side of trail balance because it always show debit balance.

Hope you satisfied

Anand,

There are students from non commerce background  pursuing CA and they dont have  enough practice in basic accounting initially.Plz dont discourage ,instead u  help them  and motivate them.Its my request.

Hi,

This is method of groupong all debits & credits under one head.

In Trail Balance we shows Debit at left side & Crdeits at right side.

You only think how it would look if we mix debits & credits.

Its jut way of organised presentation..

Hope you are cleared now..

Rgds//vaibhav

I am also a cpt student,here is a question from mercantile law that.

What will happen to the contract which comes into existence on 30th sep 1932,as the indian contract law comes into operation on 1st oct 1932 ??? is it valid or not.....enforceable or not.??

Hi Harish,

Logic is like this:

At the end of the year you close all the your ledger accounts. At that time you find that some ledger shows Credit closing Balance (i.e.Credit Side is more) and some account shows Debit closing Balance (Debit side is more).

In Trail Balance the ledger account closing balance will be written on Debit column if it shows debit balance and vis a vis.

Shortcut:

All Income shows Credit Balance

All Expenses shows Debit Balance

All Assets shows Debit Balance

All liabilities shows Credit Balance

Friend’s categorizations of golden rules are as under

Real A/c:

Dr what comes in and Credit what goes out

Personal A/c:

Debit the receiver and credit the giver

Nominal A/c

Debit all the expenses and losses and Credit all incomes and gains

If u wants to journalese any entry then, first think what type of a/c it is, then apply the golden rules

Hope this will benefit to you.

Originally posted by : Rakesh Mishra
	Friend’s categorizations of golden rules are as under   Real A/c:   Dr what comes in and Credit what goes out   Personal A/c:   Debit the receiver and credit the giver   Nominal A/c   Debit all the expenses and losses and Credit all incomes and gains   If u wants to journalese any entry then, first think what type of a/c it is, then apply the golden rules   Hope this will benefit to you.

Good Answer Rakesh Ji,

One More think i would like to Add is that.....we get the closing balance of all the ledger and from there we prepare the final account.

Harish Kumar, are you from commerce background or non-commerce..