Registering transactions with individuals, companies, or companies are considered personal accounts. Personal bills can be classified into the following categories:
(1) Natural Personal Personal Accounts: Personal records related to personal data, Anand's A / c, Remesh's A / c, Pankaj A / c accounts.
(2) Artificial Personal Account: Registered Companies with Limited Liability Companies. bank, company, institution, club. etc Delhi Ribbon Pine; Hans Raj College; Gymkhana Club is considered as an artificial personal account
(3) Representative Personal Accounts: Records related to expenditures and incomes are listed as a contact list. However, in some cases, due to accounting correspondence, the amount may be paid to individuals for a specific time or for individuals.
Such amount (a) represents the specific level of development of expenditure or income and (b) represents persons for whom it is payable or for whom it is reclaimed. Such accounts shall be deemed to be representative personal accounts, e.g. "Unpaid wages", prepaid insurance account. etc
Transactions of tangible objects (to be touched, purchased and sold) like goods, cash, building. machines, etc., are considered realistic invoices.
since a. immaterial things (which have no physical shape), such as goodwill, patents and copying rights. trademarks, etc., are considered as intangible real accounts.
Accounts for Profit Taxes for Losses. expenditures and incomes, for example. rents, salaries, wages, commissions, interest rates, bad debts, etc. As we have already discussed, where the nominal account represents the amount payable or payable to each person, it is called a representative personal account.
Debiting and Borrowing Rules (Classification Based)
1. Personal accounts: load buyer, credit the supplier (supplier)
2. Real bills: Load what's coming, credit what's happening
3. Nominal accounts: loads and losses, loan receivables and gains.
Tips for Logging
The following discussion helps diagnose the transaction to find out which accounts are relevant to entering the journal entry.
first Handling Money / Credit Transaction
Please read carefully the following transactions:
(i) Purchased Items Rs. 1,200 cash. .
(ii) Purchased Goods Rs. 1200th
(iii) Purchased Goods Rs. 1,200 from Arun.
(iv) Purchased Goods Rs. 1,200 of Arun's cash.
Transactions (i) and (iv) are clear because they explicitly stated that purchases were made in cash. Thus, the entry is as follows:
Purchase Account for Dr. 1,200 Cash Account 1,200
Transactions (ii) and (iii) are not unique to whether the purchase relates to cash or credit. However, transaction (ii) does not mention the supplier's name; so it means that the purchase is cash. Similarly, transaction (iii) mentions the name of the vendor, but it does not speak about cash – which means that the purchases are authentic: so the transaction (iii) entry
is Purchase Account Dr. 1200 to Amex 1200.
2. Managing Payment on Personal and Cost Accounts
If you pay the person against payment for a payment, then the personal account of the creditor must be debited. However, if a payment is made to a business representative, then the given (nominal) bill must be charged
. Handling the receipt of a personal / income account
If the amount is recovered against a person against the amount recoverable against the amount, the personal account of the debtor shall be approved. However, if the amount received is a business income then the given income (nominal) account should be approved. Commercial Discount Management
In many cases the seller allows the customer to deduct from the ticket price. Such a deduction is referred to as a 'trade discount'. The commercial rebate is not recorded in the bookkeeping. The transaction is only recorded with the net amount, ie (price list discount).
5th Handling Cash (Full Balance) Management
In some cases, the lender may assign a debtor to call for payment for the duration of the loan. Such concessions are called "cash discounts". The person who receives the payment will allow and represent the expenses. This is the person making the payment and is income
. Bad Debt Management (Debtor's Insolvency)
The amount owed to the debtor is partially or wholly irrecoverable. This may be due to being declared insolvent or for any other reason. Such non-refundable amount is a loss of business activity and is borne by Bad bad debit.
7th Debt Collection Claims
It is clear from the above record that when debits are written off, they are credited to the personal account. If, after a certain period of time, any payment is received against a previously written debt, it is a revenue and, as such, is credited to the account called "Debt Collection of Bad Debts". You do not need to sign up for a personal account.
8th Managing the Owner's Personal Costs
It is very common for the owner to deduct cash or merchandise from the store for personal or household use. You may also be able to pay the owner's life insurance premium. Similarly, the income tax payable by the owner is payable. This represents the cost of the owner's personal expenses and is charged with his personal account. Drawing Account
9. Paying / Receiving Management on behalf of Customer or Supplier
In some cases, business expenses are borne by customers. Such payments are not business expenses. Therefore, the personal account of the customer concerned should be charged.
10th Handling or Replacement or New Device Old
Sometimes your business can replace your old assets with new, only the value difference is paid in cash. In such cases, the asset account only charges the amount actually paid
11. Handling Charity / Advertising Products
The business can market products in the form of a "free sample". In some cases, goods can also be distributed as a charity to increase their image. Both "ad" and "charity" are the costs of business, so you need to be billed and your purchase invoice must be approved
. Handling Accident / Fire Lost Goods
In some cases, the business may cause a loss of profit due to an accident or fire, and destroyed or damaged goods may be insured. In such cases, the total value of lost or destroyed goods is credited to the purchase account and (i) the insured insurance policy is borne by the Insurer; (ii) the Balance is charged to a Loss / Fire Account
. Handling of amortization on fixed assets
Fixed assets are assets / assets used to carry on business. plants, machinery, buildings, etc. Depreciation is a constant drop in asset value due to wear, over time, and obsolescence. Depreciation is treated as a business expense. The depreciation account is debited and the corresponding asset account is credited.
14th Handling of Payments / Receipt of Representative Personal Invoices
When the previous accounting year was closed, businesses incurred expenditures that were not paid. The so-called "Outstanding Expenses". This is a representative personal account. The actual payment is made in the current accounting period, the debit of the account concerned and the crediting of the cash account.
Advantages of the Journal
(1) Transactions are recorded in chronological order, reducing the transaction.
(2) Transactions are certainly accompanied by narratives. Thus, the entry is supplemented with basic information on transactions.
(3) Load and loan amounts are written side-by-side. Minimizes the chance of giving a bad amount.
Limited Use of Journal
Originally, the system of recording financial transactions was: (1) the narrative of individual transactions, the book of the original record,
that is, the Journal, and then (2) the placement on the ledger accounts, that is, the ledger. As the number of transactions increased, the system was modified and similar transactions
says purchases, sales, cash, etc. Instead of the journal, they were recorded in the subdirectory
(i) If there are too many transactions in the journal, it will be difficult.
(ii) Every business cash balance must be stated at regular intervals, say everyday: so that a separate book was used for cash withdrawal
(iil) By recording transactions of a similar nature. For example, one of the sub-journals states that for purchases, logs spend time and effort during the recruitment and posting during purchases.
For the reasons listed above, the journal now only describes transactions that are seldom listed. Today's computer bookkeeping has been very easy and accurate to record the journal.  1969. [1959-1900] Double Entry System
The XV. In a century, a Franciscan monk Lucas Pacioli described the way the accounts were settled in such a way that the double aspect (present in every account transaction) was expressed as a debit amount and equal and compensating credit amount.
The double entry system is the system under which all transactions are double and both aspects are recorded to get a complete record of transactions. The double-entry system of the bookkeeping complies with the rule. for each transaction, the debit amount (s) must be equal to the amount of the loan. That's why this system is a double entry.
Advantages of the Double Entry System
(i) Allows full records of business transactions.
(ii) the arithmetic accuracy of the invoices based on the balance and credit of the invoices
(iii) the profit or loss of the business activity during the accounting period
(iv) the financial position of the business at the same time. The total resources of the store, the claims of outsiders, the amount payable by outsiders, etc. It is presented in a statement on a balance sheet.
(v) It allows comparison of the current year and previous years with the owner to manage your business on the right lines
(vi) Reduces the inseparable chances of equal opportunities for errors in the accounting records. .
(vii) Provides help with accurate and accurate account details. Other accounting systems. In addition to the dual entry system, there is a one-off access system
The single registration system is a "bookkeeping system in which only cash and personal accounts are always maintained" (19659003) Journal Article
If a journal entry contains only one an account must be charged and only one account is debited and credited to the account, such entry is a "Simple Journal Entry", but in some cases the entry may require more than one load or credit or both. These entries are called composite entries, to create:  (i) The transaction is on the same day
(ii) One of such transactions is common and
(iii) The accounts concerned more than two are actually mixed inputs of two or more simple logs ntries .
Source by sbobet