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Accounting Procedures—Rules of Debit and Credit 6.3

Solved Questions

1. On which side will the increase in the following accounts be recorded? Also, mention the
nature of the account.

(i) Machinery A/c (ii) Creditor’s A/c (iii) Mohan (Proprietor)
(iv) Sales A/c (v) Carriage Outwards A/c (vi) Cash A/c
(vii) Debtor’s A/c (viii) Rent A/c (ix) Interest Payable A/c

Solution:
(i) Debit—Asset (ii) Credit—Liability (iii) Credit—Capital
(iv) Credit—Revenue (v) Debit—Expense (vi) Debit—Asset
(vii) Debit—Asset (viii) Debit—Expense (ix) Credit—Liability
2. On which side will the decrease in the following accounts be recorded? Also, mention the
nature of account.
(i) Mohan (Proprietor) (ii) Freight A/c (iii) Cartage A/c
(iv) Bank A/c (v) Furniture A/c (vi) Machinery A/c

(vii) Sohan (Customer) (viii) Salary Outstanding A/c (ix) Ram (Supplier)
Solution:
(i) Debit—Capital (ii) Credit—Expense (iii) Credit—Expense

(iv) Credit—Asset (v) Credit—Asset (vi) Credit—Asset
(vii) Credit—Asset (viii) Debit—Liability (ix) Debit—Liability
3. State with reasons, when each of the following accounts are debited or credited:
(i ) Accounts to be debited (ii) Accounts to be credited
(a) Pushkar’s Drawings A/c (a) Pushkar’s Capital A/c
(b) Furniture A/c (b) Machinery A/c
(c) Salary A/c (c) Commission A/c
(d) Bank A/c (d) Bank A/c

Solution:
(i) Reasons when the following are debited:
(a) Pushkar’s Drawings A/c: At the time when the proprietor withdraws cash, goods
or services from his business for personal use, Drawings Account is debited.
(b) Furniture A/c: At the time when the furniture is purchased not with the purpose
to resell but for use in business, it is a fixed asset.
(c) Salary A/c: Salary to the office staff, paid or payable is debited to Salary Account
being an expense and at the year-end it is transferred to Profit & Loss Account.
(d) Bank A/c: At the time when cash or a cheque or a bank draft is deposited.