Page 120 - Office Practice and Accounting -9

Depreciation on fixed assets
Depreciation charged on machinery Rs. 8,000.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Depreciation A/c...................Dr. 8,000
To Machinery A/c 8,000
(Being depreciation charged on
machinery)

Here depreciation is loss for organization, so it is debited and it reduces the value of
machinery (i.e. fixed assets) so machinery is credited.

Payment of expenses
Salaries for the month Rs. 15,000 paid.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Salary A/c...............................Dr. 15,000
To Cash A/c 15,000
(Being salary paid )

Here salary is expense and related to nominal A/c. In nominal account, expenses are
to be debited so, salary A/c is debited and cash goes out, so cash A/c is credited being
real A/c.

Outstanding Expenses

Rent outstanding Rs. 7000.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Rent A/c.............................Dr. 7000
To Outstanding Rent A/c
(Being rent outstanding) 7000

Here, rent is still to be paid and it should be added to rent expenses, so rent is debited.
Outstanding rent means increase in liabilities and it is credited.

Prepaid expenses

Salary prepaid Rs. 2,500

Date Particulars LF Dr (Rs.) Cr (Rs.)
Prepaid Salary A/c.................Dr. 2500
To Cash A/c
(Being Salary paid in advance) 2500

116 Office Practice and Accounting 9