CBSE Questions for Class 9 Elements Of Book Keeping And Accountancy Nature Of Accounts And Rules Of Debit And Credit Quiz 6 - MCQExams.com

Prepaid (Unexpired) expense is a personal account and is shown on the Assets side of a balance sheet. 

According to the accrual concept of accounting, transactions are recorded in the books of accounts at the time of their occurrence and not when the actual cash or a cash equivalent is received or paid.

 In bookkeeping and accounting, a ledger is a book (or record) for collecting historical transaction data from a journal and organizing entries by account. The ledger provides the transaction history and current balance in each accounting system account, throughout the accounting period.

A bill payable is a document which shows the amount owed for goods or services received on credit (meaning not paid at the time that the goods or services were received). The provider of the goods or services is referred to as the supplier or vendor. Hence, a bill payable is also known as an unpaid vendor invoice.

Golden Rules of Accounting :-

• Personal Account - Debit the Receiver & Credit the Giver.
• Real Account - Debit what Comes In & Credit what Goes out.
• Nominal Account - Debit all Expenses and Losses & Credit all Income and Gains.

In bookkeeping, a debit can signify an increase in an asset, an expense, and the owner's draws. A debit can also signify a decrease in a liability, revenues, and owner's equity.

The term credit has its roots set in the latin word 'creditum' which means "that which is entrusted or loaned" which also came from 'credere' which means "to trust or entrust".

The installation expenses for a new machinery will be debited to machinery account. 

All the incidental expenses incurred in reference to an asset till the asset is ready for put to use are treated part of the asset cost and to be debited to the respective asset account.

'Debit' is a formal bookkeeping and accounting term that comes from the Latin word "debere", which means "to owe". 

In bookkeeping, a debit is an entry on the left side of a double-entry bookkeeping system that represents the addition of an asset or expense or the reduction to a liability or revenue.

Assets, expenses, losses, and the owner's drawing account will normally have debit balances. 

Their balances will increase with a debit entry, and will decrease with a credit entry. Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances.

Journal is a book of accounts in which all day to day business transactions are recorded in a chronological order i.e. in the order of their occurence. 

Transactions when recorded in a Journal are known as entries.It is the book in which transactions are recorded for the first time.

Books of original entry refers to the accounting journals in which business transactions are initially recorded. The information in these books is then summarized and posted into a general ledger, from which financial statements are produced.