MGT101 Assignment No. 1 Solution

MGT101 Assignment#01 Solution Spring 2013

See the attached please 

Please correct if i am wrong 

Attachments:

•  MGT101_Assignment_#01_Solution_Spring_2013.pdf, 429 KB
• 
  

• Rules of debit and credit are as under:

Increase in asset is debit
Decrease in asset is credit

Increase in expense is debit
Decrease in expense is credit

Increase in income is credit
Decrease in income is debit

Increase in liability is credit
Decrease in liability is debit

Increase in capital is credit
Decrease in capital is debit

• What are the rules for debit and credit in accounting?

There are three Golden Rules for Debit & Credit, whole accounting is depend on these three rules :- 1. Debit what comes in & Credit what goes out. 2. Debit the receiver & Credit the giver. 3. Debit all loss/expenses & Credit all gains/profits. Regards Jawad
increase in asset is debit & decrease in asset is credit

The above rules do not always apply, It is not as simple as Debit is what comes in and Credit is what goes out. If you pay a bill, yes you "Credit" the cash that is going out, but you also Debit the expense account (the opposite side).

The basic rules are, for every Debit there must be an equal Credit and (of course) for every Credit there must be an equal Debit. Debits and Credits MUST BALANCE, ALWAYS!

The terms Debit and Credit literally mean

Debit = Left side of the accounting columns
Credit = Right side of the accounting columns

Also look at Revenue, if you GET money for doing a job or selling a product, there are TWO Sides that must Equal, if you receive cash you (Debit) Cash, but at the same time you must also (Credit) Income (Revenue).

Assets increase with a Debit (as do expense accounts)
Liabilities increase with a Credit (as do Owners Equity or Capital accounts)Permalink  Reply by + M.Tariq Malik + on Wednesday

Date	Accounts Involved	Debit Rs.	Credit Rs.	Applied Rule of Debit and Credit with respect to the nature of account
March 01	Bank Capital	900,000	900000	Increase in asset a/c Increase in owner’s equity a/c
March 01	Advance rent bank	90,000	90,000	Increase in asset a/c Decrease in asset a/c
March 01	Equipment Cash Ammar rental	280,000	170,000 110,000	Increase in asset a/c Decrease in asset a/c Increase in liability a/c
March 04	Office supplies Office furniture Asher & co.	5000 50,000	55,000	Increase in asset a/c Increase in asset a/c Increase in liability a/c
March 08	Cash Rent received	10,000	10,000	Increase in asset a/c Increase in income a/c
March 10	M/S ABC Rent	5000	5000	Increase in asset a/c Increase in income a/c
March 17	Repairing & maintenance cash	3400	3400	Increase in expense a/c

Decrease in asset a/c March 27Bank charges

Bank150
150Increase in expense a/c

Decrease in asset a/c March 30Bank

M/S ABC10,000
10,000Increase in asset a/c

Decrease in asset a/c March 31Salaries

cash3600
3600Increase in expense a/c

Decrease in asset a/c

Date	Accounts Involved	Debit Rs.	Credit Rs.	Applied Rule of Debit and Credit with respect to the nature of account
March 01	Bank Capital	900,000	900000	Increase in asset a/c Increase in owner’s equity a/c
March 01	Advance rent bank	90,000	90,000	Increase in asset a/c Decrease in asset a/c
March 01	Equipment Cash Ammar rental	280,000	170,000 110,000	Increase in asset a/c Decrease in asset a/c Increase in liability a/c
March 04	Office supplies Office furniture Asher & co.	5000 50,000	55,000	Increase in asset a/c Increase in asset a/c Increase in liability a/c
March 08	Cash Rent received	10,000	10,000	Increase in asset a/c Increase in income a/c
March 10	M/S ABC Rent	5000	5000	Increase in asset a/c Increase in income a/c
March 17	Repairing & maintenance cash	3400	3400	Increase in expense a/c Decrease in asset a/c
March 27	Bank charges Bank	150	150	Increase in expense a/c Decrease in asset a/c
March 30	Bank M/S ABC	10,000	10,000	Increase in asset a/c Decrease in asset a/c
March 31	Salaries cash	3600	3600	Increase in expense a/c Decrease in asset a/c

For important helping material related to the subject ( Solved MCQs, Short Notes, Solved Past Papers, E-Books, Recommended Books, FAQs, Short Questions Answers & more). You must view all the featured discussion in this subject group.