Debit and Credit

Rangarajan (CA Student) (200 Points)

15 July 2008  

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