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Commerce Exam  >  Commerce Questions  >  Debit the receiver and credit the giver is co... Start Learning for Free
Debit the receiver and credit the giver is correct for. 

  • a)
    Personal

  • b)
    Real

  • c)
    Nominal 

  • d)
    Hypothetical

Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
Debit the receiver and credit the giver is correct for.a)Personalb)Rea...
Debit the receiver and credit the giver is correct for Personal accounts in accounting. Let's understand this concept in detail:

Personal Accounts:
Personal accounts are those accounts that represent individuals, firms, companies, etc., with whom the business has transactions. These accounts can be further divided into three categories - Natural persons, Artificial persons, and Representative persons.

Examples of Personal Accounts:
- Natural persons: Ram, Shyam, etc.
- Artificial persons: ABC Ltd., XYZ Ltd., etc.
- Representative persons: Outstanding rent, Outstanding salary, etc.

Debit the Receiver and Credit the Giver:
In accounting, every transaction has two aspects - Debit and Credit. The rules for debiting and crediting different types of accounts are different. In the case of personal accounts, the rule is "Debit the receiver and credit the giver."

Explanation:
When a business receives something from a person, it is termed as the receiver. On the other hand, when a business gives something to a person, it is termed as the giver. Let's understand this with the help of an example:

Suppose Ram purchased goods worth Rs. 10,000 from ABC Ltd. In this case, the following entry will be passed:

ABC Ltd. A/c..........Dr. 10,000
To Ram A/c....................... 10,000

Explanation:
- ABC Ltd. is the giver as it has given goods worth Rs. 10,000 to Ram.
- Ram is the receiver as he has received goods worth Rs. 10,000 from ABC Ltd.
- Hence, the entry will be "Debit the receiver and credit the giver."

Conclusion:
Therefore, we can conclude that "Debit the receiver and credit the giver" is correct for Personal accounts in accounting.
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Community Answer
Debit the receiver and credit the giver is correct for.a)Personalb)Rea...
Debit the receiver, and credit the giver" is a golden rule for Personal A/c. Personal accounts are the accounts for individual, firms, companies etc. By debit the receiver means the person who is receiving goods on credit will be debited and the person who is giving will be credited.
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Read the following hypothetical Case Study and answer the given questions:Mr. Manoj Manohar Lal Started a new business with a cash of ₹60,000 by the name Manohar Lal and Sons on the 1st of March 2020. For the business, he had to purchase furniture on the 2nd of March worth ₹10,000. He decided to buy the goods for cash as well on that day for ₹25,000 and on credit from Jankidas and Sons for ₹50,000. On the 4th of March he was able to sell the goods at ₹60,000 out of which 75% was on credit to different people. On the 5th of March he bought further goods from Kamlesh worth ₹15,000 and on the same day he sold goods at ₹36,000 for cash. On the 8th of March he received 80% of the cash from his debtors and so he paid his creditor Jankidas and Sons ₹40,000. On the 10th of March he sold goods to Hari at ₹30,000 and paid ₹15,000 to Kamesh. Hari paid him ₹18,000 on the 14th of March. On 16th he purchased goods worth ₹14,000 from Sohan out of which he paid ₹8,000 in cash. On the 20th he paid the office rent of ₹1,000 and received commission of ₹750. On the 24th there was a lockdown announced, so he paid salary to his employee of ₹1,200 and told him not to come until things are better. Hari on the same day transferred to his bank account ₹12,000 and he withdrew ₹4,000 for personal use.The goods purchased from Kamlesh will be recorded in ____________ Account.

Read the following hypothetical Case Study and answer the given questions:Mr. Manoj Manohar Lal Started a new business with a cash of ₹60,000 by the name Manohar Lal and Sons on the 1st of March 2020. For the business, he had to purchase furniture on the 2nd of March worth ₹10,000. He decided to buy the goods for cash as well on that day for ₹25,000 and on credit from Jankidas and Sons for ₹50,000. On the 4th of March he was able to sell the goods at ₹60,000 out of which 75% was on credit to different people. On the 5th of March he bought further goods from Kamlesh worth ₹15,000 and on the same day he sold goods at ₹36,000 for cash. On the 8th of March he received 80% of the cash from his debtors and so he paid his creditor Jankidas and Sons ₹40,000. On the 10th of March he sold goods to Hari at ₹30,000 and paid ₹15,000 to Kamesh. Hari paid him ₹18,000 on the 14th of March. On 16th he purchased goods worth ₹14,000 from Sohan out of which he paid ₹8,000 in cash. On the 20th he paid the office rent of ₹1,000 and received commission of ₹750. On the 24th there was a lockdown announced, so he paid salary to his employee of ₹1,200 and told him not to come until things are better. Hari on the same day transferred to his bank account ₹12,000 and he withdrew ₹4,000 for personal use.For the sale of goods on 4th of March how much will be recorded in the Cash Account.

Read the following hypothetical Case Study and answer the given questions:Mr. Manoj Manohar Lal Started a new business with a cash of ₹60,000 by the name Manohar Lal and Sons on the 1st of March 2020. For the business, he had to purchase furniture on the 2nd of March worth ₹10,000. He decided to buy the goods for cash as well on that day for ₹25,000 and on credit from Jankidas and Sons for ₹50,000. On the 4th of March he was able to sell the goods at ₹60,000 out of which 75% was on credit to different people. On the 5th of March he bought further goods from Kamlesh worth ₹15,000 and on the same day he sold goods at ₹36,000 for cash. On the 8th of March he received 80% of the cash from his debtors and so he paid his creditor Jankidas and Sons ₹40,000. On the 10th of March he sold goods to Hari at ₹30,000 and paid ₹15,000 to Kamesh. Hari paid him ₹18,000 on the 14th of March. On 16th he purchased goods worth ₹14,000 from Sohan out of which he paid ₹8,000 in cash. On the 20th he paid the office rent of ₹1,000 and received commission of ₹750. On the 24th there was a lockdown announced, so he paid salary to his employee of ₹1,200 and told him not to come until things are better. Hari on the same day transferred to his bank account ₹12,000 and he withdrew ₹4,000 for personal use.The amount deposited by Hari directly in the bank will be recorded in the ____________ account.

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Debit the receiver and credit the giver is correct for.a)Personalb)Realc)Nominald)HypotheticalCorrect answer is option 'A'. Can you explain this answer?
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