Question

What do you understand by principle of double entry? Give the rules of debit and credit

with suitable examples.

Answer 1

double entry is nothing but for every debit there is an equal and opposite credit

double accounting principles depends upon type of account

in case of personal account
debit receiver
credit giver

in case of real account
debit what comes in
credit what goes out

in case of nominal account
debit all expenses and losses
credit all incomes and gains

examples:
if x purchase chair from y on credit then accounting entry is
chair account dr
to y account

why chair account is debited in the above entry?

since chair is real account and it is coming in, we have debited the same

why y acccount is credited?

since y is the personal account and he is the giver, we have credited the same