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    The document discusses the double-entry system of bookkeeping. It defines personal accounts as those linked to a single entity, real accounts as those representing tangible assets with monetary value, and nominal accounts as non-physical accounts used to record income, expenses, losses, and gains. Examples are provided for each type of account. The rules for recording transactions in each type of account are also outlined, such as debiting personal accounts for money received and crediting for money given.

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    The document discusses the double-entry system of bookkeeping. It defines personal accounts as those linked to a single entity, real accounts as those representing tangible assets with monetary value, and nominal accounts as non-physical accounts used to record income, expenses, losses, and gains. Examples are provided for each type of account. The rules for recording transactions in each type of account are also outlined, such as debiting personal accounts for money received and crediting for money given.

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    20 views3 pages

    Chapter 7 Double Entry System: Very Short Questions

    Uploaded by

    Vipul
    The document discusses the double-entry system of bookkeeping. It defines personal accounts as those linked to a single entity, real accounts as those representing tangible assets with monetary value, and nominal accounts as non-physical accounts used to record income, expenses, losses, and gains. Examples are provided for each type of account. The rules for recording transactions in each type of account are also outlined, such as debiting personal accounts for money received and crediting for money given.

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    Chapter 7 Double Entry System

    Very Short Questions

    Question 1

    What is the double-entry system of book-keeping?

    Solution: The double-entry system is an accounting system which affects at least two accounts
    simultaneously with every transaction. Two such examples are debit and credit account.

    Question 2

    State two type of accounts

    Solution: The two types of accounts are.

    (i) Personal account

    (ii) Real account

    (iii) Nominal account

    Question 3

    What are the personal account?

    Solution: The account which is linked to a single company, institution, or a firm is known as a
    personal account.

    Question 4

    What are the real account?

    Solution: These are accounts whose value is estimated in money and the business properties are
    known as a real account. Few examples are furniture account, cash account, etc.

    Question 5

    What are the nominal account?

    Solution: All the accounts which are only mentioned but does not really exist is known as nominal
    account. For instance expense and income account.

    Question 6

    What are a natural personal account? Give an example.

    Solution: ‘Natural Personal Account’ means all the account linked to a human being. Such as
    Priya’s account.

    Question 7

    What are artificial personal accounts? Give an example.

    Solution: These accounts do not have a physical existence, such as human being, but are
    considered as a personal account. For example, a company’s account.

    Question 8

    What are representative personal accounts? Give an example.


    Solution: When an account represents an individual or a group of individual, is known as a
    representative personal account. Such as outstanding rent account.

    Question 9

    What is the rule of recording transactions in a personal account?

    Solution: The rule of recording transactions in a personal account is depicting debitor as receiver
    and creditor as a giver.

    Question 10

    What is the rule of recording transactions in a real account?

    Solution: The rule of recording transactions in a personal account is recording debit as what
    comes in and credit as what goes out.

    Question 11

    What is the rule of recording transactions in a nominal account?

    Solution: The rule of recording transactions in a personal account is recording debit as losses and
    expenses and credit as gains ans income.

    Practical Questions

    Question 1

    Classify the following accounts under personal, real or nominal accounts:

    (i) Commission Paid (iv) Prepaid Salaries

    (iii) Commission Accrued (vi) Discount Allowed

    (v) Leasehold Property A/c (viii) Life Insurance Corporation of India

    (vii) Carriage Inwards A/c (x) Rent Received in Advance

    (ix) Drawings A/c (xii) Sales A/c

    (xi) Debtors (xiv) Bank Overdraft

    (xii) Rent Paid in Advance (ii) Commission Received

    Solution:

    Personal Account Real Account Nominal Account


    (iii) Commission Accrued (v) Leasehold Property A/c (i) Commission Paid

    (iv) Prepaid Salaries (ii) Commission Received

    (viii) Life Insurance (vi) Discount Allowed

    (ix) Drawings A/c (vii) Carriage Inwards Account

    (x) Rent Received in Advance (xii) Sales A/c


    (xi) Debtors

    (xii) Rent Paid in Advance

    (xiv) Bank Overdraft

    Question 2

    Classify the following into real, personal, or Nominal account.

    1. Capital 2. Drawings 3. Cash paid 4. Cash Received 5. Commission Paid 6. Commission Received
    7. Purchases A/c 8.Sales A/c 9. Furniture 10. Cash A/c 11. Bank A/c 12. Bank Overdraft 13.
    Debtors A/c 14. Creditors A/c 15. Travelling Expenses 16. Goodwill 17. Patents 18. Salary A/c 19.
    Salary Outstanding A/c 20. Insurance A/c 21. Insurance Prepaid A/c 22. Bad Debts are written off
    23. Bad Debts Recovered

    Solution

    Personal Account Real Account Nominal Account


    1. Capital 5. Commission Paid

    3. Cash paid

    2. Drawings 6. Commission Received 7. Purchases A/c

    11. Bank A/c 4. Cash Received 8.Sales A/c

    12. Bank Overdraft 9. Furniture 15. Travelling Expenses

    13. Debtors A/c 10. Cash A/c 18. Salary A/c

    14. Creditors A/c 16. Goodwill 20. Insurance A/c

    19. Salary Outstanding A/c 17. Patents 22. Bad Debts are written off

    21. Insurance Prepaid A/c 23. Bad Debts Recovered

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