Hi Every One
I have a doubt in the golden rules.
I learned the following,
For Real Accounts – Debit Inwards and Credit Outwards
For Nominal Accounts – Debit Expenses and Credit Incomes
For Personal Accounts – Debit the Receiver and Credit the Giver
Take a look at the following entries I pass:
Descripttion of the transaction |
Entries I pass |
|
|
Sale to a customer for Rs. 100 |
Customer a/c 100 Sales a/c 100 |
Receipt of Rs. 90 on the proceeds of sale after a discount of Rs. 10. |
Bank a/c 90 Customer a/c 90 |
Discount of Rs. 10 booked |
Discount a/c 10 Customer a/c 10 |
The above entries were learned by me from my professors and seniors.
Now, my doubt
In the last entry of booking discount, why do you credit the customer? As per the rule, one can credit the party only when he when he gives. But he doesn’t give anything.
I know that everyone passes entries as per the golden rules. I want to know how the golden rules were formed. I want to how whether anyone has gone beyond the golden rules.
What I want to know is
Particulars |
Rules Followed |
Why not this followed at the time of creation of Debit and Credit |
For Real Accounts |
Debit Inwards and Credit Outwards |
Credit Inwards and Debit Outwards |
For Personal Accounts |
Debit the Receiver and Credit the Giver |
Credit the Receiver and Debit the Giver |
For Nominal Accounts |
Debit all Expenses and Credit all Incomes |
Credit all Expenses and Debit all Incomes |
Please give your comments and opinions on my query. I am not telling what we follow is wrong but I want to analyze the situation.
Regards
Rangarajan.K