Accounting principles | First step to Accounting Career

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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About the author /


Mahendra is founder and CEO of the I Vision Infotech, Authorised Tally Sales and Service Partner and helping Tally users to learn Tally and accounting free through this site

11 Comments

  1. mohammed ali

    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

  2. Ginny Mittal

    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

    • Mahendra

      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

  3. Reena

    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.

  4. Shiv Singh Rawat

    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.

  5. umesh shejole

    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

  6. Niranjan.K.P

    Dear sir,
    I am working in electrical contracting company in Bahrain.Here just using only excel for accounting.there is no proper accounting .I studied tally erp9.0 in 2009-10.Last 2 year am working in this company.unfortunately i forger the entry’s in tally.now I just download the free version of tally.but I didn’t understand anything now.Now I tell to my employer to buy a tally.he will ready to buy for me.he already gave he order.may be next month onwards tally will be installing here.before that I want know minimum basic of tally erp9.please help me.sir.please give me favorable reply.am wait fr your kindnesses.please help me sir

    • Mahendra

      Niranjan, K.P.
      We help personally only to clients of I vision Infotech who purchase the software through us

  7. Mitan

    my self as a consultant which account should i maintain whether singal entry or double entry and how should i record the transaction

  8. bipin

    i would like to learn tally erp 9 so how fast i can learn it.

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