Classification of Accounts – Hints for Journalizing – Advantages of Journal

Individual Accounts

Records recording exchanges identifying with people or firms or organization are known as close to home records. Individual records may additionally be delegated :

(1) Natural individual’s very own records: The records recording exchanges identifying with singular people e.g., Anand’s A/c, Remesh’s A/c, Pankaj’s A/c are delegated normal individual’s very own records.

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(2) Artificial individual’s very own record: The records recording exchanges identifying with restricted organizations. bank, firm, foundation, club. and so forth for example Delhi Cloth Mill; Hans Raj College; Gymkhana Club are named fake people’s very own records.

(3) Representative individual records: The records recording exchanges identifying with the costs and wages are named ostensible records. In any case, in specific cases because of the coordinating with idea of bookkeeping the sum, on a specific date, is payable to the people or recoverable from people.

Such sum (a) identifies with the specific head of use or pay and (b) addresses people to whom itis payable or from whom it is recoverable. Such records are delegated agent individual records for example “Wages Outstanding Account”, Pre-paid Insurance Account. and so on

Genuine Accounts

The records recording exchanges identifying with substantial things (which can be contacted, bought and sold) like products, cash, building. apparatus and so forth, are delegated substantial genuine records.

While the records recording exchanges identifying with. elusive things (which don’t have actual shape) like generosity, licenses and duplicate rights. exchange marks and so on, are named elusive genuine records.

Ostensible Accounts

The records recording exchanges identifying with the misfortunes, gains. costs and wages e.g., Rent, pay rates, compensation, commission, premium, awful obligations and so forth are delegated ostensible records. As of now talked about, any place an ostensible record addresses the sum payable to or receivable from specific people it is known as agent individual record.

Rules of Debit and Credit (order based)

  1. Individual Accounts: Debit the recipient, Credit the (provider)
  2. Genuine Accounts: Debit what comes in, Credit what goes out
  3. Ostensible Accounts: Debit costs and misfortunes, Credit livelihoods and gains.,

Clues for Journalizing

The accompanying conversation will help in diagnosing the exchange so as to discover which records are pertinent for passing the diary passage.

  1. Treatment of money/credit exchange.

Peruse cautiously the accompanying exchanges:

(I) Purchased products for Rs. 1,200 money. .

(ii) Purchased products for Rs. 1,200.

(iii) Purchased products for Rs. 1,200 from Arun.

(iv) Purchased products for Rs. 1,200 from Arun on cash.

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