Many accounting teachers may face following problem in teaching of journal entry in accounts.
Which account should be debited or credited
Basic rules of double entry system are three and every rule have further two parts. But some time teacher can not teach perfectly these rules to 10+1 commerce students about which account should be debited or credited. I can explain this problem with following example.
It is possible that accounting teacher will write three rules of double entry on the black/ white board and then write its journal entry
Purchase account Dr. 500000
Cash account Cr. 500000 Accounting teacher can argue that goods are being come in business so, it will be debited and cash is going from business, so it will be credited in journal entry.
But student may confuse or puzzle. He asks his accounting teacher. Why has he not debited to Mrs. Rekha account? Because goods are received by Mrs. Rekha. First rule's first part says who is receiver will be debited. This is the problem which is often faced in teaching journal entry in accounts.
I can help teacher to solve this problem. Persuade your student affectionately just like below
My dear student, it is very good that you are using your brain. You have asked me question. You are confused which rule of double entry will apply first or second for debiting or crediting account. Dear, first of all one important thing is that businessman can not be debited or credited himself in his own accounting books. You can ask me. Why can businessman not be debited or credited? Because business is separate from businessman. So, if we have to pass the journal entry in the books of Rekha, then even Rekha has received the goods, then we can not debited owner of business. Moreover, there is not a specific person, it may possible the goods can be received by employee of Rekha's business or even relative of Rekha can receive the goods. So, second rule is more powerful than first rule of double entry. What comes in business must be debited. So, I have debited Purchase account. I have also credited cash. If we purchase the goods with cash or via cheque. There is no need to know who is the giver of money . Forget his name. In one day, it is possible that you are dealing with 1000000000000000000000000000 people for purchasing or selling. Record their names only in books, if you have to pay or get money. Otherwise your accounts book will become just list of customers or suppliers. If you are interested to know customer. Determine the aim of your life as salesman not accountant. So, if Rekha has purchased goods with cash, then who only credit what goes from business and that is cash. So, cash will be credited.
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