Nominal Accounts:
These accounts are those accounts in which transactions will be maintained as income/ expense or profit/ loss between supplier and Customer.
Rule or Formulas
All expenses and losses always Dr. side.
All income and gains always Cr. side.
Discount allowance(DA) always Dr. side.
Discount received(DR) always Cr. Side.
Transactions:
Purchase goods by David from William to cash $1200 and discount received $300.
Purchase a/c - Dr. $1500
to DR - Cr. $300
to Cash - Cr. $1200
Purchase furniture from David to cash $750 and discount received $250.
Purchase a/c - Dr. $100
to DR - Cr. $250
to Cash - Cr. $750
Sold goods to William for cash $2000 and discounts allow $1200.
Cash a/c - Dr. $2000
DA a/c - Dr. $1200
to Sale a/c - Cr. $3200
David sold goods to William for cash $700 and DA $250.
Cash a/c - Dr. $700
DA a/c - Dr. $250
to Sale a/c - Cr. $950
Purchase furniture by William to cash $1500 and DR $1000.
Furniture a/c - Dr. $2500
to DR a/c - Cr. $1000
to Cash a/c - Cr. $1500
Machine bought from David to cash and DR $225 and $275.
Machine a/c - Dr. $1500
to DR a/c - Cr. $225
to Cash a/c - Cr. $1275
David received cash $1575 and DA $25 for sale.
Cash a/c - Dr. $1575
to DA a/c - Dr. $25
to Sale a/c - Cr. $1600
Purchase goods from David $700 and DR $300.
Purchase a/c - Dr. $1000
to DR a/c - Cr. $300
to Cash a/c - Cr. $700
William paid cash $1500 for purchase furniture from David and DR $150.
Furniture a/c - Dr. $1650
to DR a/c - Cr. $150
to Cash a/c - Cr. $1500
Sold machine for cash and DA $150 and $1500.
Cash a/c - Dr. $1500
to DA a/c - Dr. $150
to Machine a/c - Cr. $1650
Paid cash with discount $120 on $800.
Purchase a/c - Dr. $920
to DR a/c - Cr. $20
to Cash a/c - Cr. $800
Received cash $800 and discount $200 given by David to William.
Purchase a/c - Dr. $1000
to DR a/c - Cr. $200
to Cash a/c - Cr. $800
William bought furniture with a discount of $200 on $1000.
Furniture a/c - Dr. $1000
to DR a/c - Cr. $200
to Cash a/c - Cr. $800
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