পৃষ্ঠাসমূহ

রবিবার, ১২ মার্চ, ২০২৩

Debit/Credit Determination Rules

1. As per the American Method Debit/Credit Determination Rules, formulae are below: 

For Assets

i. Increase in Assets.
ii. Decrease in Assets.

i. Debit (dr.)
ii. Credit (Cr.)

For Liabilities

i. Decrease in Liabilities.
ii. Increase in Liabilities.

i. Debit (dr.)
ii. Credit (Cr.)

For Capital

i. Decrease in Capital.
ii, ncrease in Capital.

i. Debit (dr.)
ii. Credit (Cr.)

For Incomes

i. Decrease in Income.
ii. Increase in Income.

i. Debit (dr.)
ii. Credit (Cr.)

For Expense

i. Increase in Expense.
ii. Decrease in Expense.

i. Debit (dr.)
ii. Credit (Cr.)

For Stock

i. Increase in Stock.
ii. Decrease in Stock.

i. Debit (dr.)
ii. Credit (Cr.)

2. Debit/ Credit Determination Rules on as per Account:

(i) Personal Account:
a. Debit the receiver or who owes to business.
b. Credit the giver or to whom business owes.

(ii) Real Account
a. Debit what comes into business.
b. Credit what goes out of business.

(iii) Nominal Account
Debit all expenses or losses.
Credit all income or gains.

Illustration:Determine the debit and credit from the following particulars under Modern Approach.

(a) Started business with capital.

(b) Bought goods for cash.

(c) Sold goods for cash.

(d) Paid salary.

(e) Received Interest on Investment.

(f) Bought goods on credit from Mr. Y

(g) Paid Rent out of Personal cash.

Solution:

 

Effect of Transaction

Accounts

To be debited/Credited

(a)

Increase in Cash

Increase in Capital

Cash A/c

Capital A/c

Debit

Credit

(b)

Increase in Stock

Decrease in Cash

Purchase A/c

Cash A/c

Debit

Credit

(c)

Increase in Cash

Decrease in Stock

Cash A/c

Sale A/c

Debit

Credit

(d)

Increase in Expense

Decrease in Cash

Salary A/c

Cash A/c

Debit

Credit

(e)

Increase in Cash

Increase in Income

Cash A/c

Interest A/c

Debit

Credit

(f)

Increase in Stock

Increase in Liability

Purchase A/c

Y A/c

Debit

Credit

(g)

Increase in Expense

Increase in Liability

Rent A/c

Capital A/c

Debit

Credit



Illustration: Ascertain the Debit Credit under British Approach or Double Entry System. Take previous illustration.

 

Step-I

Step-II

Step-III

Step-IV

(a)

Cash A/c

Capital A/c

Real

Personal

Comes in

Giver

Debit

Credit

(b)

Purchase A/c

Cash A/c

Nominal

Real

Expenses

Goes out

Debit

Credit

(c)

Cash A/c

Sales A/c

Real

Nominal

Comes in

Incomes

Debit

Credit

(d)

Salary A/c

Cash A/c

Nominal

Real

Expenses

Goes out

Debit

Credit

(e)

Cash A/c

Interest A/c

Real

Nominal

Comes in

Incomes

Debit

Credit

(f)

Purchase A/c

Y’s A/c

Nominal

Personal

Expenses

Giver

Debit

Credit

(g)

Rent A/c

Capital A/c

Nominal

Personal

Expenses

Giver

Debit

Credit


Mohammad Shahajahan FCS, CFC, CPFA
Financial Management Specialist
NATP-2 Project,
Ministry of Agriculture

কোন মন্তব্য নেই:

একটি মন্তব্য পোস্ট করুন