Page 28 - DMGT403_ACCOUNTING_FOR_MANAGERS

Unit 2: Recording of Transactions

The second account which gets affected is the personal A/c of representations. The goods sold Notes
out on credit led to register the receiver of goods who has not paid at the moment of sale. Gopal
is the individual received the goods on credit during the sales expected to make the payment as
per the terms of credit period. Till the maturity of the credit period agreed, the firm should wait
and collect the amount from the individual who is nothing but the receiver of goods.
Movement-out – Goods are moving out of the firm Credit what goes out
Real A/c Sales A/c
Receiver of benefits- Receiver of the goods on credit with Debit the receiver
Personal A/c future relationship Gopal A/c

Next step is to record the journal entry
Gopal A/c Dr 15,000

To Sales A/c 15,000
(Being goods sold on credit to Gopal)
Transaction in between the Real A/c and Nominal A/c

Example: Office Rent paid 10,000
The two different accounts involved in the above illustrated transaction are the Rent A/c and
Cash A/c. It is because of the cash payment at the moment of making the payment of rent.
The Rent which is paid to the owner is an expense out of the benefits derived out of the asset
during the previous month. In accordance with the Nominal A/c all the expenses are to be
recorded, i.e. “Debit all the expenses and losses”.
The second is in relevance with the cash payment which finally led to the movement of cash
resources from the firm to the owner of the Asset. This mobility of the assets leads to movement-
out which in connection with the Real A/c is the account for the assets.

Rent paid Expense- Nominal A/c-
Office Rent paid Debit All expenses and losses
Movement -out Cash – Real A/c-
moving out of the firm Credit what goes out

Example: Journalize the following transactions with narration:

Date Particulars
2010
June 1 Receive cash from Ramu 2,500
June 4 Purchase goods for cash 1,000
June 5 Sold goods to Hari 4,000
June 8 Bought furniture from Raju 500
June 10 Paid for office stationery 150

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