Question

Vehicle rent paid to harish account

Answer 1

The Current transaction affects two accounts vehicle Rent account(it is a nominal account;all losses Gains income expenses come under nominal account; vehicle Rent is an expense),, Bank/cash account.. because rent is paid cash ...(it is a Real account; all assets and Liabilities come under Real account: cash balance is an asset) ..


The Three golden rules of accounting are....

Personal Account: Debit the receiver, credit the giver

Nominal account: Debit All expenses and losses, credit All incomes and gains

Real Account: Debit what comes in ,credit what goes out

In contention with the above rules...

Vehicle Rent account should be debited (it is a nominal account/its an expense)

cash account should be credited (it is a Real account/cash from bank is Going out)

The Journal Entry will be....

vehicle Rent a/c Dr xxxxx

To cash a/c. xxxx

(Being life insurance premium paid)