Q.Analyse the following transactions, stating the two accounts involved, their classification under the Modern Approach, and which account is debited and which is credited:

This is the standard step-by-step method for turning a plain transaction sentence into a debit and a credit, before it is ever journalised.

Applying the four-step method: (i) Purchases (Expense) increases, Cash (Asset) decreases → Debit Purchases A/c, Credit Cash A/c. (ii) Salary (Expense) increases, Cash (Asset) decreases → Debit Salary A/c, Credit Cash A/c. (iii) Cash (Asset) increases, Commission Received (Income) increases → Debit Cash A/c, Credit Commission Received A/c. (iv) Mohan …

Each transaction is analysed by identifying the two accounts involved, classifying each under the Modern Approach, deciding whether each has increased or decreased, and applying the Modern Rule.

For every transaction, first write down the TWO account names, then classify each (Asset/Liability/Capital/Revenue/Expense, or Personal/Real/Nominal), then ask whether each has increased or decreased (or received/given), and only then apply the ru …

In transaction (iv), students sometimes credit Mohan's A/c instead of debiting it, confusing "sold to Mohan" with "Mohan gave something." Since the sale is ON CREDIT, Mohan now OWES the business — he is a Debtor, …