Accounting principles knowledge is the first step to Accounting Career. An understanding of the Accounting principles Guarantees a success in the Accounting Career
We have already read about basic of accountancy and some thumb rules relating to Accounting principles
Concept of Accounting Principles
As This is a world wide fact, there are 3 Thumb Rules in Accountancy related to Accounting principles and in our earlier article, we have already read about the 1st Rule of Individual Accounts. now let’s see further understanding of Accounting Principles.
Rule No.2) Goods/Assets Account
Debit whatever comes in
&
Credit whatever goes out
All, you need is just remember this rule and apply a common understand what is coming in your business and what is going from your business! Once you understand this, you will be able what should be debited and what should be credited!
If you sold goods to Mr. Y on credit than here two accounts are involving in this transaction
One is Individual Accounts and other is goods account
So, debit Mr. Y and credit goods sales account for the amount of transaction
Now, look to the 3rd Accounts “Income and Expenses of profit and loss account
The rule for these kind of account is :
“Debit the expenses/loss and
Credit the Income/Profit Account”
If you pays Rs. 1500 towards purchase of various stationery then you have to debit the stationery account and credit the cash account.
More about Accounting Principles
In my next article I will classify the items comes generally under the three broad categories e.g.
1) Individual Accounts 2) Goods & Assets Accounts and 3) Income/Expenses or Profit and Loss Account
Accounting principles |The First steps in Accountancy
Once you understand the Accounting Principles, working with Tally will be easy for you. Try to create a company in Tally as per the instructions given in step by step company creation.
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hello sir
my self mohammed ali and i want to know that how we use tally to maintain accounts for service type bussiness like banks and cell phone company
warm regards
Ali
I found your teachings and guidance very beneficiary for freshers in accounting like me, I would want you to tell me the basic steps of maintaining accounts for my company. I owns a travel company and want to maintain my accounts in tally. I purchase bookings from different agencies and then sell it to the hotels and resorts, i pay service tax as well.Can you clarify me upon contra entry? Kindly help me for this.
Respect to you
regards
Ginny Mittal
Hello Ginny,
Thanks for your feedback.
Surely, I can help you. but you should know me your Tally.erp 9 serial number. it will help me to understand your Software details and configuration
Please help me to know that how to use the tally to maintain the accounts in company line.how to insert the entery in tally.please give me the suggestion.
Please help me to know that how to use the tally to maintain the accounts in company line.how to insert the entery in tally.please give me the suggestion.
Thanks
when i create any ledgers entry in my tally then some thing mistakes from me i think i don’t know or forget Accounting principle thanks really very helpful article