Ch.# 2 NATURE OF ACCOUNTS AND RULES OF DEBIT AND CREDIT

Chapter # 2		NATURE OF ACCOUNTS AND RULES OF DEBIT AND CREDIT
Q.1:	Define personal accounts?
Ans:	Accounts relating to person, firms or companies are called personal account?
Q.2:	Define real accounts?
Ans:	Accounts which keep records of properties or things owned by a business are called “Real Accounts”.
Q.3:	Define nominal accounts?
Ans:	All those accounts which keep the records of expenses, gains and losses are called “Nominal Accounts”.
Q.4:	What are different kids of accounts according to British Approach?
Ans:	i)       Personal accountsii)    Real accounts  iii)  Nominal accounts.
Q.5:	What do you know about debit and credit rules of real accounts?
Ans:	Debit what comes in and credit what goes out.
Q.6:	What do you know about debit and credit rules of personal accounts?
Ans:	Debit the receiver and credit the giver.
Q.7:	What do you know about debit and credit rules of nominal accounts?
Ans:	Debit all expenses and losses and credit all gains or incomes.
Q.8:	What are different kinds of accounts according to American approach?
Ans:	i)       Assetsii)    Liabilities  iii)  Capital or owner’s equity iv)   Revenues v)      Expenses
Q.9:	What is the rule of debit and credit of asset according to American approach?
Ans:	In crease in asset should be debited while decrease in asset should be credited.
Q.10:	What is the rule of debit and credit of expense according to American approach?
Ans:	Increase in expense should be debited while decrease in expenses should be credited.
Q.11:	What is the rule of debit and credit of revenues according to American approach?
Ans:	Increase in income should be credited and decrease in income should be debited.
Q.12:	Define “valuation accounts”?
Ans:	All accounts of provisions like provision for depreciation and provision for doubtful debts are called valuation accounts.
Q.13:	Wha tis the rule of debit and credit for “valuation accounts”?
Ans:	Increase in valuation accounts should be credit and decrease in valuation accounts should be debited.