Book KeepingBook keeping is the method to record commercial transaction.Commercial transaction means transactions which have their own minority value. In bookkeeping all commercial transaction are written and the book kept safely.
The book keeping is stated or invented by “Lucas Pacioli”. He was an Italian citizen who belongs to Venis (Venis is a city). He invented the bookkeeping in 1494 .
In book keeping all commercial transaction are classified in three categories.
1. Personal account: –
those who identified by their own identification is known as personal account. Like individual, bank, company, shop etc.
Types of personal account:-
a. Natural personal account:- Human beings means individual. Like “Ram kumar a/c.”
b. Artificial personal account: – It is created by law or person. Like “company”, “store”, “bank” etc.
c. Representative personal account: – Outstanding income or expenses. Those account which are opened or represent an individual or group of individual is known as representative personal account.
Debit The receiver
Credit The giver
2. Real account: –
those things which can be seen, touch, feel and also those things have their own resale value. Is known as real account. Like “computer”, “cash”, “furniture”, “goodwill”etc.
Types of real account.
a. Tangible account: – those things which can be seen, touch, feel and also those things have their own resale value. Like “computer”, ‘air condition” etc.
b. Intangible account:- those things which can’t be seen, touch but we can feel and also those things have their own resale value. Like “trademark”, “patent” etc.
Debit What comes in
Credit What goes out.
3. Nominal account: –
those things which can’t be seen or touch and also they have not any resale value. Like “rent”, “salary” “expenses”, “wages” etc.
Types of nominal account
a. Direct expenses: – belongs to purchase, production or factory expenses only.
b. Indirect expenses: – other than purchase production or factory.
expenses and loses are Debit
Income and gain are Credit
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