Journal entry representative personal a/cs query

 

Q. interest is due to a creditor
 
entry
 
interest A/C Dr
    to creditor A/C
 
justify the creditor account according to golden rules of accounting
according to modern concept it is a liability that's why we are crediting it but according to traditional approach its also a personal A/C n rule for personal accont is DR the receiver n Cr the giver ??
pls justify crediting the creditor's A/C for giving what ??
 
 
same case for 
 
salary A/C Dr
   to outstanding salary A/C
 
crediting outstanding salary account for giving what (personal account rule- cr the "giver")
 
i am cleared with the modern concept but golden rules are partially confusing!
 
help ?
Replies (3)

The interest portion arises only due to Creditor.Hence he is the giver in this case.Same rule also apply to salary outstanding.

 

The interest portion arises only due to Creditor.Hence he is the giver in this case.Same rule also apply to salary outstanding.

 

here interest is due hence liability is created. while paying entry would be

Creditor 

    to Bank

here creditor(personal a/c) is receiver hence debited.

In brief while passing due entry we are just creating a liability and not paying hence creditor can not be debited.

 

 

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