BOOKS OF ORIGINAL ENTRY AND CLASSIFYING

ACCOUNTS By: Abhilash Puliamkulangara Debarun Saha Roy Dinesh Prabhu Hareesh Nalam Vaibhaw Kholia

Accounts

Personal

Real

Nominal

Natural

Artificial

Representative

Tangible

Intangible

Expenses and Losses

Incomes and Gains

PERSONAL ACCOUNTS
All accounts which can be attached to an individual or an organization. It can be either an asset or liability.
Accounting Rule: Credit the giver, debit the receiver. Example: Capital account, Mr. Kholias account, M/s Prabhu & co. account, etc.

REAL ACCOUNTS
All asset accounts are clubbed under Real accounts. Accounting rule: Debit what comes in and credit what goes out.

Tangible : Cash account, furniture account, etc.

Intangible : Goodwill account, patents account, etc.

NOMINAL ACCOUNTS
All income, expenses comes under nominal accounts
Accounting rule: Debit all losses and expenses and credit all incomes and profits. Example of nominal accounts: Interest account.

JOURNAL

A journal details all the financial transactions of a business and which accounts these transactions affect.

Typically, journal entries are entered in chronological order and debits are entered before credits.

JOURNAL FORMAT
DATE PARTICULA RS L.F DEBIT RS. CREDIT RS.

POSTING

The term Posting means transferring the debit and credit items from the journal to their respective accounts in the ledger. It should also be noted that the exact names of accounts used in the journal should be carried to the ledger

LEDGER
A book which contains various accounts. In other words, Ledger is a set of accounts. It contains all accounts of business enterprise whether Real, Nominal or Personal. Two types are:

Bound Ledger

Loose Leaf Ledger

LEDGER

DR

CR

DATE

PARTICU J.F LARS

AMOUN T(RS)

DATE

PARTICU J.F LARS

AMOUN T RS.

On first January, 1991 A started business with capital of 20,000 and his transactions of the month were as follows: Jan.2 Purchased building for cash 8,000 Jan.8 Purchased goods from C 1,000 Jan.15 Sold goods for cash 500 Jan.20 Goods returned to C 100 Jan.22 Sold goods to R 400 Jan.25 R returned goods 25 Jan.31 Salaries paid for the month 200 Jan.31 Rent paid for the month 150

Date
Jan. 1

Particulars
Cash Account ... To Capital Account (Capital introduced) Dr

L.F

Debit
20,000

Credit

20,000
Dr

Jan 2.

Building Account ... To Cash Account

8,000 8,000

(Building purchased for cash)

Jan. 8

Purchases Account ... To Sales Account

Dr

1,000 1,000

(Goods purchased on credit form C)

Jan. 15

Cash Account ... To Sales Account (Goods sold for cash)

Dr

500 500

Jan. 20

C ...

Dr

100 100 400 400

To purchases Returns Account (Goods returned to C)

Jan. 22

R ... To Sales Account (Goods sold on credit)

Dr

Jan. 25

Sales returns Account To R (Goods returned by him)

Dr

25 25

Jan. 31

Salaries Account ... To Cash Account (Salaries paid)

Dr

200 200

Jan. 31

Rent Account ... To Cash Account (Rent paid in cash)

Dr

150 150

Cash Account

DATE

Particulars

J.F

Amount

Date

Particulars

J.F

Amount

Jan-01 To capital account

20000

Jan-02 By building account

8000

Jan-15 To Sales account

1000

Jan-31 By Salaries account

200

Jan-31 By rent account

150

By balance c/d

12650

To balance b/d

12650

Thank You