1. Hi, Shalini, the entry for salary made would be like this…

      Salary A/c. ....Dr.
      To Cash A/c. ...Cr.

      Because salary is the expense that’s why it is debited and cash is going out so it is credited.

  1. All the expenses and losses come on the nominal side but why outstanding expenses come on the personal side?

    1. Nominal accounts prefixed or suffixed with the terms outstanding, prepaid, or pre-received are personal accounts. Because Outstanding Expenses A/c is a personal account with a credit balance. The balance indicates the amount that is owed by the Organisation on account of unpaid expenditure.

  2. Hi Atul Sir, I have big problems with journal entries, sometimes I couldn’t understand which a/c should be debited and which should be credited. So, Please clear me.

    1. Hi Ziya, always remember in an easy way like –

      “Giver was Rich then it is always in Credit and Receiver was Poor then it is always in Debit”.

  3. Hey Atul Kumar, Thanks very much for your time and effort on answering such questions. I have also something to ask:

    1. From the three a/c rules, which one can be apply for Liabilities and Capital A/c.?
    2. What is the difference between adjusted trial balance and unadjusted trial balance?
    3. What are their advantages in accounting.

    Eva Jacks

    1. Hi, Eva, thanks for your feedback and I am glad that you have shown interest in accounts. Below is the answer to all your queries.

      1. Liabilities are noted under Real A/c. and Capitals are noted under Personal A/c.
      Read more about Classification of Accounts here.

      2. The differences between an adjusted trial balance and an unadjusted trial balance are the amounts recorded as part of the adjusting entries. Adjusted trial balance is one where are the adjustments are taken into consideration and its final. Un-adjusted trial balance is in its intermediary state and there are adjustments to yet to be made to them.

      3. Trial balances give a snapshot of the state of the company at periodic intervals, such as monthly or quarterly, by looking at all entries in the company’s general ledger.

      I hope your all doubts are clear now.

  4. Hello sir, Please clear me here – the (debit the receiver, credit the giver) rule for Personal A/c. Why we debited the receiver? For example: I paid Rs. 1000 to Ram. It means ram is reciver and Ram is debited by 1000. Since I gave the money, my account should be debited and vice versa. But double entry rule says opposite and it confuses me all time. Please help me.

    1. Hello, Poonam, I can understand that account is not easy to start, we have to understand the whole process first. Let’s come to the point. Double-entry accounting is based on the fact that every financial transaction has equal and opposite effects in at least two different accounts. So each entry has to be recorded by maintaining the relations.

  5. Good afternoon sir, first of all thanks for making this simple to us. Please my question is what are the likely questions interviewer asked in term of accounting in bank for instance.

    1. Thanks for the comment Okunzuwa Sarah. This seems to be career based question so I better answer in that way. You will be asked questions like payments, receipts, outstanding, taxes, bills of exchange and all. You’ll be asked any question that related to banking sector and based on real life transactions. Most bank uses accounting software here are some of them – CGram Software, Financial Force, Microsoft Accounting Professional, Microsoft Dynamics AX and Microsoft Small Business Financials.

  6. Sir, Please tell me the entry of “Interest received from bank”. Here interest is a Nominal A/c and bank is Personal A/c.

    1. It’s so simple Sourav,

      Bank A/c ............... Dr.
      To Interest Received ... A/c
      (Being Interest Received in Bank's Account)


      – Bank A/c. comes under Personal A/c.; so the rule we applied here is “Credit The Giver”.
      – Interest Received A/c. comes under Nominal A/c.; so the rule is “Credit All the Incomes and Gains”.

  7. Good morning sir, I have a doubt in a transaction i.e. trade discount allowed to customer on sale which account should be debited. Please give me answer.

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