what is the objective behind preparing an account? what is meant by recording on debit and credit sides of any account? explain with examples.
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Answered by
6
so that we can dave our money, 2 sothat bank couldhave its money and can give money to those who have stored it
Answered by
52
The main objective is to * to keep systematic records
* to determine profits and loss
*to ascertain financial position
*to communicate the information
recording on debit and credit sides of any account can be done with the golden rules of accounting
*personal account = rules says
debit- the receiver
credit- the giver
eg: ram , firms, company, organisation such as bank,etc
real account= rules says
debit- what comes in
credit- what goes out
eg: cash, assets like plant and machinery, building, furniture, inventory,etc
nominal account= rule says
debit- all expenses and losses
credit- all incomes and gains
eg: salary or wages paid, interest earned, interest paid, commission paid, depreciation,etc.
* to determine profits and loss
*to ascertain financial position
*to communicate the information
recording on debit and credit sides of any account can be done with the golden rules of accounting
*personal account = rules says
debit- the receiver
credit- the giver
eg: ram , firms, company, organisation such as bank,etc
real account= rules says
debit- what comes in
credit- what goes out
eg: cash, assets like plant and machinery, building, furniture, inventory,etc
nominal account= rule says
debit- all expenses and losses
credit- all incomes and gains
eg: salary or wages paid, interest earned, interest paid, commission paid, depreciation,etc.
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