Basic Rules


Accounting, Accounting Basics

Introduction


The basics of accounting contains 5 account type. and based on that Cr and Dr will be effected.

Description


The 5 baisc account types are 

  1. Liability
  2. Income and Gains
  3. Capital
  4. Assets
  5. Expense and Loss

The rules are 

A

E

Dr (Incr)

Cr (Decr)

L

I

C

Cr (Incr)

Dr (Decr)

 

Receipt  :

Here we are receiving amount which  means  Asset Increases 

Main Account -- Dr

Details(Particulars) -- Cr

Example

Cash Receipt for Loan Intrest , Share.

So for this 

Cash - Dr,

Loan Intrest , Share -- Cr

 

Payment

Main Account -- Cr

Details(Particulars) -- Dr

Example

Cash Payment for Loan, Share.

So for this  

Cash - Cr,

Loan , Share -- Dr