Accounting Process

The Recording Stage

Two Aspects of a
transaction - Debit and
Credit

The term debit is supposed to have

derived from debit and the term credit
fromcreditable.
For convenience Dr is used for debit and
Cr is used for credit.
Recording of transactions - understanding
of the rules of debit and credit relating to
accounts.
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Types of Accounts

Types of Accounts
Transactions relating to persons
Personal Accounts
Transactions relating to properties
and assets Real Accounts
Transactions relating to incomes and
expenses Nominal Accounts
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Accounts
Personal
Impersonal
Natural Legal Groups Real Nominal
-Tangible
Intangible
- Revenue,
Income and Gain
- Expense
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Rules for Accounts

Rules for Accounts

Personal Account
Debit the receiver
Credit the giver

Rules for Accounts

Real Accounts
Debit what comes in
Credit what goes out

Rules for Accounts

Nominal Accounts
Debit all expenses and losses
Credit all incomes and gains

Some Transactions

Books of Original Entry

Books of Original Entry
The Journal
Sales Journal
Purchase Journal
Cash Book
Subsidiary
Sales Return Book
Purchase Return Book Books
Bills Rec. / Payable Book
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