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What are the accounting entries for consumables of a retreading plant?
Wiki User
∙ 11y ago
Understanding basic rules of accountancy is a necessary process and one should take trouble to go through the basic rules of accounting before starting professional course like tally. Otherwise latter on the user will be confused and will start seeking guidance here and there. one more post on how to start writing books of account will also help you to understand basic rules of accounting entries.
1)Individual Accounts
2)Goods/Assets Accounts and
3)Profit/Loss or Income/Expenses Accounts
In my last post, we have seen the classification of accounts under the above mentioned 3 broad categories.
This classification is very necessary to understand the rules of 'Debit or Credit' for any transaction.
here are the rules
A) Individual Accounts
In every individual accounts, there is two possibilities.
One is gainer and another is loss er OR
One is giving and another is receiving
the THUMB RULE IS THAT
Credit the person who is giving and debit the person who is receiving.
Suppose, you have given cash rs. 1000 to Mr. X, then in your books of account you have to "
Debit Mr. X Rs. 1000
Similarly In the books of account of Mr.X he will credit your account by Rs. 1000
For your kind information, the entry is not yet complete as we have seen only one rule yet.
B) Goods/Assets Account
This rule is very simple.
" Debit what ever comes in
Credit whatever goes out "
look to the above example cash is going out so, cash will be credited.
So, let's complete the above entry
Debit Mr. X Rs. 1000.00
Credit Cash Rs. 1000.00
Similarly in the books of account Mr. X will pass entry as follows
Debit cash Rs. 1000.00 (because cash comes to him)
Credit your account with your name
Similarly ABC and Company issues a cheque of Rs. 15000 drawn on bank of Baroda to Mr. bimal kumar then entries in the books of account of M/s. ABC & Co. will be as follows:
Debit Bimal Kumar Rs. 15000.00
Credit Bank of Baroda Rs. 15000.00
Wiki User
∙ 11y ago
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