Objectives Of Accountancy | Readstall

Objectives Of Accountancy

08-12-18 Gudditi Naganjaneyulu 0 comment

Objectives Of Accountancy

The following are the some of the objectives of accountancy

  • To know the profit or loss of a company
  • Record –past- to know the future
  • To know the assets and liability of a specific period
  • To pay tax
  • Accountancy (exact figure)

Classification of accountancy  Or types of Accounts  Or golden rules of accountancy:

There are three types of accounts  they are:

  1. Personal account
  2. Real account
  3. Nominal account

Personal account:It studies about individuals.It is also dealing with names of persons, firms and companies with whom the firm deals.The rule is

             DEBIT THE RECEIVER
             CREDIT THE GIVER

Eg: – suppose x sold goods rose 10,000 toys

In the given example, why is the receiver of goods.In the books of x debit the Y account.Similarly for Y, X is the giver.Hence, in the books of yours, credit  account .The individuals are divided into two types they are:

  • Natural persons
  • Artificial persons

Natural person:The persons who are creation of god is called “Natural person”

Artificial persons:It includes corporate parties, Bank institutions, trust, school etc.….

Real account:The real accounts are opened one opened in the names of assets such as land, buildings, plant and buildings plants and machinery furniture and fixtures etc.. The rule is

            Debit what comes in

            Credit what goes out

Eg: suppose xyz firm buys plant worth Rs 40000 for cash what is coming  in to XYZ firm and what is going out into XYZ firm?

The rule is   debit what comes in so debit plant account.

            Plant (Real account (Debit (going out)

3) Nominal Accounts:

This is also called fictitious account. Nominal accounts are opened in the name of expenses, losses, profits, incomes, and gains the rule is

            Debit – all expenses and losses     

            Credit-all incomes and gains

Eg: suppose you pay Rs 500 towards the salary of clerk. what do you debit and what do you credit?

Salary for the clerk is an expense.Expense is a nominal account.The rule is ‘Debit all expenses ‘. so debit the salary account

Salary paid (expenses) →Nominal account →Debit

Cash account is credited because cash is really accountable.The rule for real account is’ credit  what goes out ‘

Cash paid (payment) →Real account→ Credit.

 



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