Receipts and Payments Account highlights total income and expenditure

Bad Debts A/c is a Nominal Account

In the Double Entry System, every business transaction affects the same side of two accounts

In the case of cheques issued but not encashed, the balance of the passbook will be more than the balance of the bank account in books of accounts

In the straight-line method the amount of depreciation decreases year after year.

In the case of the death of the partner, accounting treatment will be similar to that of a retiring partner.

The basic principle of a closing entry is that, the account to be closed should be credited if it has a debit balance and the account to which it is transferred should be debited.

Trading account is prepared to find out the Gross profit or Gross loss of the organization.

If the debit side is less than the credit side, the balance is shown as By balance c/f on the credit side of its account and it indicates debit balance.

1.      Sales are equal to Cost of Goods Sold + Gross Profit

When goods are returned to the Supplier, a Credit Note is raised and sent to the Supplier