BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rules for Real Account is
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Debit what comes in Credit what goes out
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Debit all Expenses and Lossess credit all incomes and gains
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Debit the receiver credit the giver
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None of the above
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Explanation:
Detailed explanation-1: -The golden rule for real accounts is: debit what comes in and credit what goes out. In this transaction, cash goes out and the loan is settled. Hence, in the journal entry, the Loan account will be debited and the Bank account will be credited.
Detailed explanation-2: -Real accounts: Debit whatever comes in and credit whatever goes out. Personal accounts: Receiver’s account is debited and giver’s account is credited. Nominal accounts: Expenses and losses are debited and incomes and gains are credited.
Detailed explanation-3: -The golden rule for real accounts is: Debit what comes in, Credit what goes out.
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