Check sibling questions
Accounts and Finance
Step 1 Basic of Accounts - Debits and Credits

In Accounts,there are only 2 things

  1. Profit and Loss- Containing Expenses and Incomes
  2. Balance Sheet-Containing Liabilities and Assets

 

 

Rules for Accounting

All Expenses- Debit

All Incomes- Credit

All Liabilities- Credit if Increase (Debit if Decrease)

All Assets- Debit if Increase (Credit if Decrease)

 

If we know these rules, our no entry will be wrong

Profit and Loss

Expense

Incomes

Dr

Cr

 

Balance Sheet

Liabilities

Assets

Cr (Increase)

Dr(Increase)

Dr(Decrease)

Cr (Decrease)

 

EXAMPLES 

 

Example 1:-

Internet Bill received from Reliance of Rs 2000

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Example 1 Continued

Suppose Amount paid to Reliance by Cash 2000

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Entry 2

Machine purchased from AB Technologies 50000

Amount paid by cheque

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Example 3

Sales made to Max and Co Rs 30000.

Amount received by NEFT (National Electronic Fund Transfer i.e. amount received directly in bank account)

View Answer
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Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.