a) Traditional Method (Purchase-Based Accounting) In the traditional method, all purchases made during the year are treated as direct expenses in the Trading Account. Closing stock is valued at year-end and recorded through an adjustment entry, credited to the Trading…
1.1. Journaling The process of analysing the business transactions under the heads of debit and credit and recording them in the Journal is called Journalising. An entry made in the journal is called a ‘Journal Entry’. 1.2. Posting (to Ledger) The process…
1. Double Entry System There are numerous transactions in a business concern. Each transaction, when closely analysed, reveals two aspects. One aspect will be “receiving aspect” or “incoming aspect” or “expenses/loss aspect”. This is termed as the “Debit aspect”. The…
Golden Rules of Accounting Sl. No. Name of Account Debit Aspect Credit Aspect 1 Personal Account The Receiver The Giver 2 Real Account What Comes In What Goes Out 3 Nominal Account All Expenses All Incomes If there is an…