The document outlines the principles of debit and credit in accounting, illustrating how transactions are recorded in various types of accounts, such as personal, real, and nominal accounts. It explains the impact of transactions on assets, liabilities, and owner's equity, along with detailed journal entries for various business transactions. Additionally, the document provides examples of calculating depreciation and creating provisions for doubtful debts, emphasizing the importance of accurate bookkeeping.

1. Journal-Practise Session
1

2. Debit and Credit
2
• Debit (Dr.) denotes an entry
on the left side of an
account.
• Credit(Cr.) denotes an
entry on the right side of
an account.
If there is any change on one side of the equation, there is bound to be a
similar change on the side of the equation or the opposite change on
the same side of the equation
The terms debit and credit should not be taken to mean, respectively, favorable
and unfavorable. They merely describe the two sides of the accounts

3. BITS Pilani, WILPD
Real Accounts
Debit (Dr.) Credit (Cr.)
Comes in to the Business Goes out from the Business
Journal Entries
Debit and Credit Rule
Personal Accounts
Debit (Dr.) Credit (Cr.)
Receiver Giver
Nominal Accounts
Debit (Dr.) Credit (Cr.)
Expenses or Loss of the Business Income or Profit of the Business
11/10/2024

4. BITS Pilani, WILPD
Liabilities Accounts
Debit Credit
Decrease in
Liabilities
Increase in
Liabilities
Journal Entries: Debit and Credit
Rule
Assets Accounts
Debit Credit
Increase in asset Decrease in Assets
Owner’s Equity Accounts
Debit Credit
Decrease in
Owners’ Equity
Increase in
Owners’ Equity
11/10/2024
Revenue and Expenses
Debit Credit
Expenses or Loss of the
Business
Revenue or Income or
Profit of the Business

5. Accounting for Depreciation – An expired cost of
fixed asset except land
Hospital purchased ECG machine worth Rs.2 lakhs on June 2019 and
depreciation is charged @20%.
As per the straight line method (SLM) of depreciation of 20%
Gross Block of ECG Machine on June 2019 = Rs.2,00,000
Less: Depreciation: 20% for 10 months (June to March 20): Rs.33,334 (debited to P/L A/c)
Net Block of ECG Machine as on 31st
March 2020 (B/S): Rs.166,667
Net Block of ECG Machine as on 1st
April 2020= Rs.1,66,667
Less: Depreciation 20% for 12 months (2020-21)
on gross block of fixed asset: Rs.40,000 (debited to P/L A/c)
Net Block of ECG Machine as on 31st
March 2021 (B/S): Rs.1,26,667
Net Block of ECG Machine as on 1st
April 2021 = Rs.1,26,667
Less: Depreciation: 20% for 12 months (2021-22): Rs.40,000 (debited to P/L A/c)
on gross block of fixed asset
Net Block of ECG Machine as on 31st
March 2022 (B/S): Rs.86,667
Net Block of ECG Machine as on 1st
April 2022 = Rs.86,667
Less: Depreciation: 20% for 12 months (2022-23): Rs.40,000 (debited to P/L A/c)
on gross block of fixed asset
Net Block of ECG Machine as on 31st
March 2023 (B/S): Rs.46,667

6. Accounting for Depreciation – An expired cost of
fixed asset except land
Hospital purchased ECG machine worth Rs.2 lakhs on June 2019 and depreciation is charged @20%.
As per the Written Down Value Method (WDV) method of depreciation of 20%
Gross Block of ECG Machine on June 2019 = Rs.2,00,000
Less: Depreciation: 20% for 10 months (June to March 20): Rs.33,334 (debited to P/L A/c)
Net Block of ECG Machine as on 31st
March 2020 (B/S): Rs.166,667
Net Block of ECG Machine as on 1st
April 2020= Rs.1,66,667
Less: Depreciation 20% for 12 months (2020-21)
on Net Block of fixed asset: Rs.33,334 (debited to P/L A/c)
Net Block of ECG Machine as on 31st
March 2021 (B/S): Rs.1,33,333
Net Block of ECG Machine as on 1st
April 2021 = Rs.1,33,334
Less: Depreciation: 20% for 12 months (2021-22): Rs.26,667 (debited to P/L A/c)
on gross block of fixed asset
Net Block of ECG Machine as on 31st
March 2022 (B/S): Rs.1,06,667
Net Block of ECG Machine as on 1st
April 2022 = Rs.1,06,667
Less: Depreciation: 20% for 12 months (2022-23): Rs.21,334 (debited to P/L A/c)
on gross block of fixed asset
Net Block of ECG Machine as on 31st
March 2023 (B/S): Rs.85,333

7. Creating Provision for Doubtful Bad Debt against
sundry debtors
Sold good on credit to XYZ Ltd. Worth Rs.50 lakhs
Sold service on credit to PQR worth Rs.6 lakhs
XYZ’s A/C Dr. Rs.50 lakhs
To Sales A/c Rs.50 lakhs
(Being goods sold on credit to XYZ Ltd.)
PQR’s A/c Dr. 6 lakhs
To Sales A/c Rs.6 lakhs
(Being service extended on credit to patient worth Rs.6 lakhs)
Total sundry debtors = Rs.56.00 lakhs
Create (provide) 10% provision for doubtful bad debt on sundry debtors
Bad Debt A/c Dr.5.6 lakhs (This is debited to P/L Account)
Provision for Doubtful Debt Rs.5.6 lakhs ( will be deducted from sundry
debtors in B/s. Therefore, net
sundry debtors in B/S will be
= 50.40 lakhs (56 lakhs – 5.6 lakhs)

8. Question Last Mid Sem
8
Date Transactions
January 1,
2023
Mr. Arvind invested capital in the company Rs.50,00,000
2 Took a loan from SBI for Rs. 15,00,000
4 Received advance from a customer Rs. 8,00,000 for which services still need to deliver
7 Provided services for cash Rs. 3,90,000
8 Purchased goods on credit from Krishna for Rs. 3,50,000
12 Bought furniture for office for cash Rs.2,00,000
15 Bought goods for cash Rs. 1,80,000
20 Collected receivables from customer Rs. 7,80,000 and discount allowed is
Rs. 20,000
29 Paid salaries Rs. 6,50,000
31 Paid interest on the loan for the month of January Rs. 1,20,000

9. Solution
9
Jan 01 Cash A/c Dr. 50,00,000
To Capital 50,00,000
(Being money invested in a business with cash Rs.50 Lakhs)
2 Cash A/c Dr. 15,00,000
To Loan from SBI 15,00,000
(Being loan taken from SBI worth Rs.15Lakhs)
4 Cash A/c Dr. 3,90,000
To Advance from Customer 3,90,000
(Being cash received from a customer in advance)
7 Cash A/c Dr. 3,90,000
To Sale 3,90,000
(Being goods sold for cash)
8 Purchases Ac Dr. 3,50,000
To Krishna 3,50,000
(Being goods purchased from Krishna on credit)
12 Furniture A/c Dr. 2,00,000
To Cash 2,00,000
(Being Furniture purchased for office use by cash)
15 Purchases A/c Dr. 1,80,000
To Cash 1,80,000
(Being goods purchased on cash)
20 Cash A/c Dr. 7,80,000
Discount A/c Dr. 20,000
To Account Receivables 8,00,000
(Being cash received from Dev and allowing him a discount)
29 Salaries A/c Dr. 6,50,000
To Cash 6,50,000
(Being cash paid or salaries)
31 Interest on Loan A/c Dr. 1,20,000
To Cash
(Being cash paid for interest on loan) 1,20,000

10. Type of Accounts Golden Rule
Cash – Real A/c
Capital – Personal A/c
Debit what comes in
Credit the giver
Cash A/c Dr. Rs. 2500000
To Capital A/c Rs. 2500000
(Being business started with cash Rs. 25 lakhs)
Transaction: Started Business with capital of
Rs. 2500000

11. Type of Accounts Golden Rule
Bank – Personal A/c
Cash -- Real A/c
Debit the receiver
Credit what goes out
Bank A/c Dr. Rs.200000
To Cash A/c Rs.200000
(Being cash Rs.2 lakhs deposited
in the bank)
Transaction : Opened a bank account with SBI
for Rs. 200000

12. Type of Accounts Golden Rule
Purchase – Nominal A/c
Cash -- Real A/c
Debit all expenses
Credit what goes out
Purchase A/c Dr. Rs. 100000
To Cash A/c Rs. 100000
(Being goods worth Rs. 1 lakh purchased for cash)
Transaction : Purchased goods from Tandon &
Co. for cash Rs. 100000

13. Type of Accounts Golden Rule
Purchase – Nominal A/c
Mr. Burman –Personal A/c
Debit all expense
Credit the GIVER
Purchase A/c Dr. Rs. 200000
To Burman A/c Rs. 200000
(Being for goods worth Rs. 2 lakhs
purchased goods from Burman on
credit)
Transaction : Purchased goods on credit from
Burman’s Pvt Ltd. for Rs. 200000

14. Type of Accounts Golden Rule
Burman’s - Personal A/c
Purchase Return-Nominal
A/c
Debit the receiver
Credit all gains
Burman’s A/c Dr. Rs. 50000
To Purchase Return A/c Rs. 50000
Transaction : Goods Return to Burman of Rs.
50000

15. Type of Accounts Golden Rule
Burman’s – Personal A/c
Discount – Nominal A/c
Cash - Real A/c
Debit the receiver
Credit all gains
Credit what goes out
Burman A/c Dr. Rs.150000
To Discount A/c
Rs.10000
To cash A/c
Rs.140000
(Being cash paid to Mr. Burman and
received discount worth Rs.10k)
Transaction : Paid Rs. 140000 in full
settlement

16. Type of Accounts Golden Rule
Rent - Nominal A/c
Cash - Real A/c
Debit all expenses
Credit what goes out
Transaction : Paid Mr. Dharam, the landlord
Rs. 50000 towards rent
Rent A/c Dr. Rs.50k
To Cash A/c 50k
(Being rent paid to landlord Mr. Dharam Rs.50k)

17. Type of Accounts Golden Rule
Drawings - Personal A/c
Cash - Real A/c
Debit the receiver
Credit what goes out
Drawings A/c Dr. Rs.60000
To Cash A/c Rs.60000
(Being cash withdrawn for household
expenses)
Transaction : Withdraw cash for household
expenses Rs.60000

18. Type of Accounts Golden Rule
Cash- Real A/c
Sales - nominal A/c
Debit what comes in
Credit all incomes & gains
Cash A/c Dr. Rs. 250000
To Sales A/c Rs.250000
(Being goods sold for cash)
Transaction: Sold goods to Mr. Karan for Cash
Rs. 250000

19. Type of Accounts Golden Rule
Dev – Personal A/c
Sales - nominal A/c
Debit the receiver
Credit all gains and income
Dev A/c Dr. Rs.100000
To Sales A/c Rs.
100000
(Being goods sold for dev on Credit )
Transaction : Sold goods to Dev on credit for
Rs. 100000

20. Type of Accounts Golden Rule
Sales Return – Nominal A/c
Dev - Personal A/c
Reverse transaction
Credit the giver
Sales Return A/c Dr. Rs.25000
To Dev A/c Rs.25000
(Being goods returned by Dev)
Transaction : Goods return by Mr. Dev for Rs.
25000

21. Type of Accounts Golden Rule
Cash – Real A/c
Discount- Nominal A/c
Dev – Personal A/c
Debit what comes in
All expenses and losses
Credit the giver
Cash A/c Dr. Rs.70000
Discount A/c Dr. Rs. 5000
To Mr. Dev A/c Rs.75000
(Being cash received from Dev and allowed
him discount)
Transaction : Received cash from Mr. Dev Rs.
70000 in full settlement

22. Type of Accounts Golden Rule
Furniture – Real A/c
Cash - Real A/c
Debit what comes in
Credit what goes out
Furniture A/c Dr. Rs.100000
To Cash A/c
Rs.100000
(Being Furniture purchased for office
use by cash)
Transaction: Purchased furniture for office
use for Rs. 100000

23. Type of Accounts Golden Rule
Purchase - Nominal A/c
Cash – Real A/c
Debit all expense
Credit what goes out
Purchase A/c Dr. Rs.100000
To Cash A/c Rs.100000
(Being furniture purchased for resale)
Transaction: Purchased furniture for
re-sale Rs. 100000

24. Type of Accounts Golden Rule
Cartage inwards- Nominal A/c
Cash – Real A/c
Debit all expenses
Credit what goes out
Cartage outwards- Nominal A/c
Cash - Real A/c
Debit all expenses
Credit what goes out
Cart. inwards A/c Dr. Rs.35000
To Cash A/c Rs. 35000
Cart. outwards A/c Dr. Rs.80000
To Cash Rs.80000
Transaction 1: Paid cartage on goods purchased Rs.
35000
Transaction 2: Paid Cartage on good sold Rs. 80000

25. Transaction: Purchased goods on credit
from Arora at the list price of Rs.8000. A
trade discount of 10% was allowed.
Type of Accounts Golden Rule
Purchase - Nominal A/c
Arora – Personal A/c
Debit all expense
Credit the giver
Purchase A/c Dr. Rs.7200
To Arora A/c
Rs.7200
(Being goods purchased on credit from
Arora with trade discount of 10%)

26. Transaction: Goods sold on credit to Flora
at a list price of Rs.4000. A trade discount
of 5% was allowed
Type of Accounts Golden Rule
Flora - Personal A/c
Sale – Nominal A/c
Debit the receiver
Credit the income
Flora A/c Dr. Rs.3800
To Sales A/c
Rs.3800
(Being goods sold on credit to Flora and
allowed trade discount of 5%)

27. Transaction: Received cheque from Flora
for Rs.3600 in full settlement.
Type of Accounts Golden Rule
Bank - Personal A/c
Discount A/C – Nominal A/C
Flora – Personal A/c
Debit the receiver
Debit the losses
Credit the giver
Bank A/c Dr. Rs.3600
Discount A/C Dr. Rs.200
To Flora A/c
Rs.3800
(Being cheque received from Flora in full
settlement)

28. Transaction: Paid Arora Rs.7000 by cheque
in full settlement
Type of Accounts Golden Rule
Arora - Personal A/c
Bank – Personal A/c
Discount – Nominal A/c
Debit the receiver
Credit the giver
Credit the income
Arora A/c Dr. Rs.7200
To Bank A/c Rs.7000
To Discount A/C Rs.200
(Being cheque Rs.7000 paid to Arora for full
settlement and avail discount of Rs. 200)

37. Dt Particulars Rs
1 Commenced business with cash 40,000
2 Purchased goods on credit from shyam 30,000
3 Purchased goods for cash 1,000
4 Paid Gopalan an advance for goods
ordered
2,000
5 Received cash from Murthy as advance for
goods ordered by him
3,000
6 Purchased furniture for office use for cash 2,000
Journal Entries - Questions

38. Date
2001
Particulars Debit
Rs
Credit
Rs
Jan 1 Cash Account
To capital account
(being the cash brought into business
as capital)
Dr 40,000
40,000
Jan 2 Purchases Account
To Shyam account
(being the goods purchased on credit)
Dr 30,000
30,000
Jan 3 Purchases Account
To cash account
(being the goods purchased for cash)
Dr 1,000
1,000
Jan 4 Gopalan Account
To cash account
(being the amount paid to Gopalan)
Dr 2,000
2,000
Jan 5 Cash Account
To Murthy account
(being the cash received from Murthy)
Dr 3,000
3,000
Jan 6 Furniture Account
To cash account
(being the furniture purchased for
office use for cash)
Dr 2,000
2,000
Journal Entries - Answer

39. 7 Paid wages 500
8 Received commission (in cash) 600
9 Goods returned to shyam 200
10 Goods sold to Kamal 10,000
11 Paid for postage and telegrams 200
13 Goods returned by Kamal 500
15 Paid for Stationery 200
Journal Entries - Questions

40. Jan 7 Wages Account
To cash account
(being the wages paid)
Dr 500
500
Jan 8 Cash Account
To commission received account
(being the commission received)
Dr 500
500
Jan 9 Shyam Account
To Purchase returns account
(being goods returned to shyam)
Dr 200
200
Jan
10
Kamal Account
To sales account
(being goods sold to kamal on credit)
Dr 10,00
0 10,000
Jan
12
Postages & Telegrams Account
To cash account
(being amount paid for postages &
telegrams)
Dr 200
200
Jan
13
Sales returns Account
To Kamal account
(being goods returned by Kamal)
Dr 500
500
Jan
15
Stationery Account
To cash account
(being the amount paid for stationery)
Dr 200
200
Journal Entries - Answer

41. 18 Cash Deposited at bank 500
20 Goods sold for cash 750
22 Bought goods for cash 1,000
25 Paid salaries 700
28 Paid rent 500
31 Draw cash for personal use 1,000
Journal Entries - Questions

42. Jan
18
Bank Account
To cash account
(being the amount deposited into
Bank)
Dr 500
500
Jan
20
cash Account
To sales account
(being the goods sold for cash)
Dr 750
750
Jan
22
Purchases Account
To cash account
(being the goods purchased for cash)
Dr 1,000
1,000
Jan
25
Salaries Account
To cash account
(being the amount paid as salaries)
Dr 700
700
Jan
28
Rent Account
To cash account
(being the rent paid)
Dr 500
500
Jan
31
Narayan’s Drawing Account
To cash account
(being the cash drawn for personal
use)
Dr 1000
1000
Journal Entries - Answer

43. 32 Rent Outstanding 50,000
33 Insurance Premium Paid in Advance
(Prepaid)
10,000
34 Purchased Equipment 1 Lakhs
35 Depreciation Charged @ 20% 1 Lakh
36 Create Provision for Doubtful Bad Debt
Journal Entries - Questions

44. 32 Rent A/C 50000
To Rent Outstanding A/C 50000
33 Prepaid Insurance A/C Dr. 10000
To Cash A/C 10000
34 Equipment A/C Dr. 1 Lakhs
To Cash A/C 1 Lakhs
35 Depreciation A/C Dr. 20k
To Equipment A/C (Net Block) 20k
36 Provision for Doubtful Bad Debt A/C Dr. XXX
To Sundry Debtor A/C XXX
Journal Entries - Answer