Question
Explain Deshi Nama System and Double Entry System.

Answer

There are two methods of accounting:
$1.$ Deshi Nama Accounting System and $2.$ Double Entry Accounting System.
$1.$ Deshi Nama Accounting System : Deshi Nama Accounting System Is the ancient system of keeping accounts. This ancient system of Book keeping is still followed in India. This method is similar to Double Entry Accounting System, but it is structurally different from Double Entry Accounting System. Two important books are maintained under this method. Viz - ‘Rojmel’ and ‘Katavahi’. Rojmel is the basic book of accounts, which satisfies the requirement of cash book and journal. This system is also known as ‘Vahi (Bahi) ‘Kata’ system.
$2.$ Double Entry Accounting System : In $1494$, an Italian mathematician Mr Luca Pacioli, presented firstly Double Entry Accounting System systematically. This method is widely used in India and in the other countries, as it is the most scientific method of accounting. In Double Entry System of accounting, two effects of each transaction are recorded :
They are namely: $(i)$ Debit effect and $(ii)$ Credit effect.
Whatever amount is debited, same amount is credited. In every debit entry, we are able to get information of credit entry and in every credit entry, the information of debit entry is available. This is the peculatiry of this system and therefore this entry is known as Double Entry Accounting System. In the big business concerns and in companies, the accounts are prepared mostly by this method with the help of computer. This method Is more scientific.

Need a full question paper?

Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.

Start Generating Free

Similar questions

On $1-8-16$, Jayeshbhai sold goods of $Rs.60,000$ to Dhaval on credit. $On 3-8-16$, Jayeshbhai drew two months bill on Dhaval, which Dhaval accepted and returned. On $6-8-16$, Jayeshbhai discounted this bill with the bank at $10\%$ p.a. Dhaval could not pay the money on the maturity date. The bank debited an amount of $Rs.60,500$ to Jayeshbhai’s account along with noting charges. Pass necessary journal entries in the books of Jayeshbhai and Dhaval.
State double effects of the following transactions :
Machine of $₹ 15,000$ purchased from Jay Trading Co.
From the given balances of accounts of Shri Kalpesh, prepare trial balance as at $31-3-19.$
Name of Account Amt. (₹) Name of Account Amt. (₹)
Capital $40,810$ General reserve $1000$
Stock of goods $4500$ Debtors $2610$
Purchase $12,500$ Creditors $1000$
Sales $17,500$ Building $35,000$
Goods returned debit $500$ Bad debts $250$
Goods returned credit $3570$ Wages - salary $120$
Bank balance $1230$ Rent paid $100$
Tax Insurance $610$ Advertisment expense $320$
identify account which are to be debited and credited :
Cash of $₹ 3000$ is received from Alpa.
Pass necessary rectification entries in the books of Shyam to rectify the following errors $1. R1.500$ withdrawn from bank for personal use is left to be recorded $2.$ Machine of $Rs 5.600$ is purchased from Naresh is recorded in Purchase book $3. R5500$ paid to Kajal is debited to Raj's account by mistake $4$. Goods of Rs $7$rors $00$ sold to Switoo is recorded in purchase book by mistake
Record the following transactions in the journal books of Priya
$2014$
March
$1$ Goods of $Rs. 5000$ is purchased on cash.
$4$ Goods of $Rs. Rs. 8000$ is purchased from Nandan on credit.
$7$ Goods of $Rs. 4000$ is sold to Jigna.
$12$ Commission received $Rs. 200.$
$15$ Wages expense paid $Rs. 150.$
What adjustment entries will you pass in the following situations? $1$. Salaries to six employees is outstanding for one month at a rate of $Rs.4,000$ per month. $2$. Insurance premium paid during the year was $Rs.15,000$ of which $Rs.3,000$ pertain to the next year. $3.$ A loan of $Rs.20,000 @ 18 \%$ is given to a friend before six months. He has not paid any interest, so far, on this loan.
Write journal entries for the following in the books of Pranam2015
Jan $1$ A loan of $₹15,000$ at $14 \%$ is borrowed from Pawan for business.
March $1$ A loan of $₹ 18,000$ at $18 \%$ is given (lent) to Pushkar.
June $30$ Paid interest of six month on loan borrowed from Pawan.
August $31$ From Pushkar, interest on loan is received for six months.
From the following transactions prepare sales book in the books of Shree Prabhat Hardwar Stores who is an in
$2015$
June $1$ Sold goods of $Rs.20,000$ to Neha on $3$ months credit and bill no. $80$ sent.
  $8$ Sold goods of $Rs.10.000$ to Vidhi Store at $5\%$ trade discount and sent bill no. $85$ with carriage of $Rs.400.$
  $12$ Sold goods of $Rs.15,000.$
  $15$ Sold machiery of $Rs.10,000$ for $Rs.3,000$ to Krima.
  $23$ Sold goods of $Rs.15,000$ to Shimoli at $10\%$ trade discount and half of the amount immediately paid by Shimoli. Bill no. $90.$
  $28$ Sold goods for $Rs.20,000$ to Riddhi at $10\%$ cash discount on cash.
  $29$ Meet placed an order for supply of goods of $Rs.15,000.$
  $30$ Sold goods of $Rs.30,000$ to Vraj at $10\%$ trade discount. Bill no.$ 95.$
What is errors of principle? How to rectify these errors? Explain with illustration.