Double Entry System Account - Double Entry System

Classify the following accounts into Personal, Real or Nominal accourts:

1. Machinery.
2. Capital.
3. Stock.
4. Bad Debts.
5. Goodwill.
6. Sales.
7. Drawings.
8. Salary.
9. Outstanding Salary.
10. Insurance.
11. Prepaid Insurance.
12. Interest Received.

Classify the following into three types of personal accounts:

1. Capital Account.
2. Tata Steel Company.
3. Debtors Accounts.
4. Outstanding Expenses Account.
5. Bank Account.
6. Haryana Education Board.
7. Shri Ram College of Commerce.

State to which class of accounts does each of the following relate:

1. Cash.
2. Bank.
3. Trade Marks.
4. Debtors.
5. Creditors.
6. Commission Received.
7. Accrued Commission.
8. Commission Received in Advance.

What are Nominal Accounts?

What are Representative Personal Accounts? Give one example.

What are Real Accounts?

State the Type of Accounts.

What are Natural Personal Accounts? Give one example.

Classify the following accounts under personal, real or nominal accounts:

1. Commission Paid.
2. Commission Received.
3. Commission Accrued.
4. Prepaid Salaries.
5. Leasehold Property A/c.
6. Discount Allowed.
7. Carriage Inwards A/c.
8. Life Insurance Corporation of India.
9. Drawings A/c.
10. Rent Received in Advance.
11. Debtors.
12. Sales A/c.
13. Rent Paid in Advance.
14. Bank Overdraft.

Give the rules of Debit and Credit and explain them with imaginary examples.
Under Double Entry System of accounting each transaction has two aspects. One aspect is debit, i.e., receiving or incoming aspect. Another aspect is credit, i.e., giving or outgoing aspect. Debit and credit aspects of a transaction form the basis of Double Entry System.
Rules of Double Entry or Rules of Debit and Credit are formed on the basis of these two aspects in each of the business transactions. There are two approaches for deciding when to write on the debit side of account and when to write on the credit side of an account, i.e., which account is to be debited and which account is to be credited. The rules or: the basis of which such decision is taken are called Rules of Debit and Credit.
Rules of Debit and Credit (Traditional Classification) at a Glance:

S.No	Types of Account	Account to be Debited	Account to be Credited
1	Personal Account	Receiver	Giver
2	Real Account	What comes in	what goes out
3	Nominal Account	Expense and Loss	Income and Gain

From the following transactions, state the nature of accounts and state which account will be debited and which account will be credited:

S.No		₹
1	Mohan started business with cash	5,00,000
2	Purchased goods for cash	1,00,000
3	Sold goods for cash	1,50,000
4	Received interest from Ram in cash	500
5	Sold goods to Ashok	60,000
6	Purchased furniture for cash	50,000
7	Paid wages	20.000

What is Double-Entry System? Explain its principles and advantages.

What do you understand by the classification of accounts? Explain the different types of accounts.