Theory Base of Accounting — Account STD 11 Commerce — Question

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

Which of the following errors will affect the trial balance?

1. The total of the Sales Book has not been posted to the Sales Account.
2. ₹ 1,000 paid as installation charges of a new machine has been debited to Repairs Account.
3. Goods costing ₹ 4,000 taken by the proprietor for personal use have been debited to Debtors Account.
4. ₹ 1,000 paid for repairs to building have been debited to Building Account.

What is GST?

What do you understand by 'debit' and 'credit? Do you think 'debit' always stands for decrease in amount and credit for increase?

What entry (debit or credit) would you make to:

1. Increase revenue.
2. Decrease in expense.
3. Record drawings.
4. Record the fresh capital introduced by the owner.

A Company has been charging depreciation @ 10% p.a. on original cost method. It now wants to change the method from original cost to diminishing balance method, the rate of depreciation being 15% p.a. Can it do so?

What is Noting of a bill of exchange.

Pass entries in the books of Devdhar & Bros. Odisha, assuming all transactions have been entered within the state, charging CGST and SGST @ 9% each:

2018
March 4	Purchased goods for ₹ 5,00,000 from Sunil Bros.
March 7	Goods returned to Sunil Bros. for ₹ 20,000
March 10	Sold goods to Mehta & Co. for ₹ 8,00,000
March 12	Goods returned by Mehta & Co. for ₹ 30,000
March 20	Goods withdrawn by Proprietor for personal use ₹ 10,000
March 25	Goods distributed as free samples ₹ 5,000
March 26	Paid advertisement expenses by cheque ₹ 20,000
March 31	Payment made of balance amount of GST.

Fill in the missing figures, assuming CGST @ SGST @ 6%:

Rectify the following errors:

1. Purchases Book has been undercast by ₹ 1,000.
2. Credit sale to Anu Prakash ₹ 7,000 was recorded in Purchases Book.
3. Credit sale to Rahul ₹ 7,000 was recorded as ₹ 700.