Few common words of Account
v
Livestock – livestock is cattle, dogs, horses, sheep, and small
animals, livestock account records the monetary value of the domestic animals
used in a business such as a dog, horses, cows, etc.
Example: - Purchase two horses for 20,000 cash
Livestock a/c Dr-
20,000
To cash a/c - 20,000
(Purchase two horses
for cash)
Example: -Horse died
Profit/loss account Dr-1000
To livestock a/c
– 1000
v
Petty cash -patty cash is the money that a business or company
keeps for an employee to make small payments and purchases like paid electric bills,
paid phone bills, etc.
Example: - cash transferred as petty cash 20000
Petty cash a/c Dr- 20000
To
cash a/c – 20000
v Deprecation – deprecation
is defined as a reduction in the value of an asset that accurses over time as the
assets get older or as value and tear and its usage.
Example: - Purchase a computer for cash 10,000
Computer a/c Dr-10,000
To
cash a/c -10,000
Example: -Sold computer on depreciation for cash 2000
Depreciation a/c Dr- 20000 (30%)
To cash
a/c - 20000
v
Capital Account – owner’s investment and equity in the
business. A capital account is a general ledger account that is used to record
the owner’s contributed capital and retained earnings.
Example: -Business started by Kiran Maurya for cash 100000
Cash a/c Dr-100000
To capital a/c
– 100000
Example: -Business started by Bella & Kiran with
50,0000 cash
Cash a/c Dr-50,0000
To Bella a/c
-50,0000
To Kiran a/c
-50,000
v
Drawing Account- drawing account is the type of account that
shows how much money withdraw by business owners.
Example: - cash used by owner 10,0000
Drawing a/c Dr-10,0000
To cash a/c-10,0000
v Bank Account(cheque)- bank
account is a type of ledger balance computed by a bank at the end of each business
day and includes all withdrawals and deposits to calculate the total amount of
money in a bank account.
Example: - paid salary by cheque 10,000
Salary a/c Dr-10,000
To bank a/c
-10,000
Example: -Rs. 2,00,000 / - Transferred into SBI Bank from
Dena Bank
SBI Bank a/c Dr-2,00,000
To Dena bank
a/c -2,00,000
Example: -Purchase goods for cash
10,000
Purchase a/c Dr-10,000
To Cash a/c- 10,000
Example: - Purchase goods from Mr.
X on the credit of 20000
Purchase a/c Dr- 20,000
To MR. X a/c – 20,000
v Sales
Account: - A
sales account contains the record of all sales transactions. This includes
both cash sales and credit sales. The account total is then paired with the
sales returns and allowances account to derive the net sales figure that is
listed at the top of the income statement.
Example: - Sold goods for cash 20,000
Cash a/c Dr-20,000
To sales a/c -20,000
Example: -Sold goods to Mr. Y on credit Rs.30,000
Ramlal a/c Dr - 30,000
To sales a/c-30,000
v Purchase Return
Account: - A purchase
return occurs when the buyer of merchandise, inventory, fixed assets,
or other items sends these goods back to the seller. Excessive purchase returns
can interfere with the profitability of a business, so they should be closely
monitored.
Example: - goods return to Sunny
Deol Rs.10,000
Sunny Deol a/c Dr-10,000
To Purchase Return a/c -10,0000
v Sales
Return Account: - A
sales return is merchandise sent back by a buyer to the seller. The return
is usually because an excess quantity was either ordered or shipped or due to
defective goods.
Example: - Goods return by Bobby Deol Rs.20,000
Sales Return a/c Dr-20,000
To Bobby Deol a/c – 20,000
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