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Records recording exchanges identifying with people or firms or organization are known as close to home records. Individual records may further be delegated :

 

(1) Natural individual's close to home records: The records recording exchanges identifying with individual people e.g., Anand's A/c, Remesh's A/c, Pankaj's A/c are named regular individual's close to home records.

 

(2) Artificial individual's close to home record: The records recording exchanges identifying with restricted organizations. bank, firm, foundation, club. and so forth for example Delhi Cloth Mill; Hans Raj College; Gymkhana Club are delegated counterfeit people's close to home records.

 

(3) Representative individual records: The records recording exchanges identifying with the costs and wages are delegated ostensible records. Be that as it may, in specific cases because of the coordinating idea of bookkeeping the sum, on a specific date, is payable to the people or recoverable from people.

 

Such sum (an) identifies with the specific head of consumption or salary and (b) speaks to people to whom itis payable or from whom it is recoverable. Such records are named agent individual records for example "Wages Outstanding Account", Pre-paid Insurance Account. and so on.

 

Genuine Accounts

 

The records recording exchanges identifying with unmistakable things (which can be contacted, acquired and sold, for example, merchandise, money, building. hardware and so forth., are named substantial genuine records.

 

While the records recording exchanges identifying with. elusive things (which don't have physical shape, for example, altruism, licenses and duplicate rights. exchange marks and so on., are named impalpable genuine records.

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Ostensible Accounts

 

The records recording exchanges identifying with the misfortunes, gains. costs and livelihoods e.g., Rent, pay rates, compensation, commission, intrigue, terrible obligations and so forth are delegated ostensible records. As of now talked about, any place an ostensible record speaks to the sum payable to or receivable from specific people it is known as agent individual record.

 

Principles of Debit and Credit (grouping based)

 

1. Individual Accounts: Debit the recipient, Credit the (provider)

 

2. Genuine Accounts: Debit what comes in, Credit what goes out

 

3. Ostensible Accounts: Debit costs and misfortunes, Credit salaries and increases.,

 

Indications for Journalizing

 

The accompanying exchange will help in diagnosing the exchange so as to discover which records are important for passing the diary passage.

 

1. Treatment of money/credit exchange.

 

Peruse cautiously the accompanying exchanges:

 

(I) Purchased products for Rs. 1,200 money. .

 

(ii) Purchased products for Rs. 1,200.

 

(iii) Purchased products for Rs. 1,200 from Arun.

 

(iv) Purchased products for Rs. 1,200 from Arun on money.

 

Exchange (I) and (iv) are clear as it has been explicitly expressed that buys have been made on money. Therefore the passage is :

 

Buys account Dr. 1,200 To Cash account 1,200

 

Exchange (ii) and (iii) are not explicit with respect to whether the buys are for money or using a loan. Anyway exchange (ii) doesn't make reference to any name of the provider; subsequently it suggests that the buys are for money. Essentially exchange (iii) makes reference to the name of the provider yet is quiet with respect to money it infers that buys are using a loan: Thus the section for exchange (iii) is

 

Buys account Dr. 1,200 To Amex 1200.

 

2. Treatment of installment on close to home/costs account.

 

At the point when installment is made to an individual against sum because of him according to his record account-the individual record of the loan boss ought to be charged. Notwithstanding on the off chance that the installment is being made to an individual speaking to business consumption, at that point the specific use (ostensible) record ought to be charged.

 

3. Treatment of receipt on close to home/pay account.

 

At the point when sum is gotten from an individual against sum recoverable from him according to record account-the individual record of the indebted person ought to be credited. Be that as it may on the off chance that the sum got speaks to business pay, at that point the specific salary (ostensible) record ought to be credited.

 

4. Treatment of exchange markdown.

 

Much of the time the dealer permits to the purchaser derivation off the rundown cost. Such derivation is known as 'exchange markdown'. Exchange rebate in that capacity isn't recorded in the books. The exchange is recorded with just the net sum for example (rundown cost - exchange markdown).

 

5. Treatment-of money rebate (full repayment).

 

At times leaser may enable some admission to his indebted person to incite him to make the installment inside the time of credit permitted. Such concession is known as 'money rebate'. It is permitted by the individual getting the installment and speaks to, use. It is profited by the individual making the installment and speaks to pay.

 

6. Treatment of Bad obligations (borrower getting to be indebted).

 

A sum due from a borrower may end up gone either mostly or completely. Reason might be that he has been proclaimed wiped out or some other. Such gone sum speaks to misfortune to the business and is charged to Bad obligations sum.

 

7. Treatment of Bad obligations recouped

 

It is obvious from the above section that at whatever point hopeless sum is discounted the individual record is credited. In the event that after some time any paymentis got against an obligation recently composed of then it speaks to pay and all things considered ought to be credited to a record styled as 'Terrible obligations recuperated account'. Individual record must not be credited.

 

8. Treatment of individual costs of the proprietor

 

It is very normal for the owner to pull back money or merchandise from the business for individual or local use. Now and then premium on the existence arrangement of the proprietor may likewise be paid by the business. Correspondingly personal expense payable by the owner might be paid by business. This speaks to proprietor's close to home costs and are charged to his own record viz. Drawings account.

 

9. Treatment of installment/receipt in the interest of client or provider.

 

Sometimes business may pay costs for the benefit of its clients. Such installments don't establish the consumption of business. Subsequently it ought to be charged to the individual record of the concerned client.

 

10. Treatment or trade or new resource with old one.

 

Once in a while business may trade its old resource with new one-just the distinction in worth is paid in real money. In such cases resource record needs charge just with the genuine sum paid.

 

11. Treatment of merchandise given as philanthropy/ad.

 

Business may appropriate merchandise as 'free examples' to promote its items. Now and again it might likewise disperse products as philanthropy to support its picture. Both 'ad' and 'philanthropy' are costs of the business, thus ought to be charged and buys record ought to be credited.

 

12. Treatment of products lost in mishap/fire.

 

For certain situation a business may endure loss of products because of some mishap or fire and so on., obliterated or harmed merchandise may have been guaranteed moreover. In such cases all out estimation of merchandise lost or devastated is credited to buys account and the (I) protection guarantee conceded is charged to Insurance Company (ii) balance is charged to misfortune coincidentally/fire account.

 

13. Treatment of deterioration charged on fixed resources.

 

Fixed resources are those properties/assets of the business which are utilized for carrying on of business viz. plant, hardware, building and so forth. Devaluation is the perpetual lessening in the estimation of an advantage because of mileage, section of time and oldness. Deterioration is treated as a business use. Devaluation record is charged and the separate resource record is credited.

 

14. Treatment of installment/receipt of agent individual records.

 

At the end of the past bookkeeping year a business may have acquired use which stayed unpaid. It is known as 'Extraordinary consumption'. It is a delegate individual record. At the point when genuine installment is made in current bookkeeping period the concerned record is charged and money record is credited.