Page 121 - Office Practice and Accounting -9

Here, salary is paid in advance. Expenses advance is assets, so it is debited. On the
other hand, cash is going outside, so it is credited.
Income receipts

1. Commission received Rs. 600.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Cash A/c................................ Dr. 600
To Commission A/c 600
(Being commission received )

Here, cash is received so, as per the rule of real account, it is debited. Similarly, as per
the rule of nominal account, commission is credited because it is income.
Bad Debt written off

Rs. 200 to be received from Kamal is written off as bad debt.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Bad debt A/c...........................Dr. 200
To Kamal's A/c 200
(Being amount receivable from
Kamal written off as bad debt)

Here bad debt is debited on the basis of rule of nominal account because it is loss for
the firm. Kamal is credited to settle his account.

Goods lost in accident
Goods of Rs. 500 lost in an accident in godown.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Goods lost A/c......................Dr. 500
To Purchase A/c 500
(Being goods lost in an accident)

Here according to the rule of nominal account, losses are debited and purchase
account is to be credited to reduce the value of goods.

Goods distributed as free sample
Goods of Rs. 700 distributed as free sample for market promotion.

Date Particulars LF Dr (Rs.) Cr (Rs.)
Advertisement A/c................Dr. 700
To Purchase A/c 700
(Being goods distributed as
free sample for advertisement)

Office Practice and Accounting 9 117