Question

State the nature of the following as per modern approach of accounting, Also state on which side will the increase in the following account will be recorded. Bills Payable xi. Copyright Cash credit xii. Sale of Goods Inventory of raw material xiii. Livestock Bank overdraft xiv. Discount allowed Ram, Proprietor xv. Investments Drawings xvi. Bank Loan Debentures xvii. Creditors Public deposit xviii. Debtors Cartage xix. Prepaid Rent Machinery xx. Accrued Commission.

Answer 1

Explanation:

Under the Modern Approach, the accounts are not debited and credited. Hence, the Accounting Equation is used to debit or credit an account. Thus, it is also known as the Accounting Equation Approach. ... Also, a transaction may affect two accounts on the debit side or two accounts on the credit side.