RULES OF DEBIT AND CREDIT

Goodwill is an intangible Fixed assets . It's a very important in terms making profit. Every business entity main motives is to earn profit. Goodwill plays an important role in making profit.For better understanding the meaning of Goodwill we can see the following example -There is a cosmetic business owned by Mr.Asim kumar Porel .it's net worth i.e assets and liabilities is Rs. 240000 now if a purchaser (namely Pragati & sister's co. ) to pay Rs 250000 for it the extra 10000 is known in accounting as Goodwill.  Goodwill can classified in the following ways : 1)Cat Nature Goodwill  2) Rat Nature Goodwill  3)Dog Nature Goodwill  4) Rabbit Natur Goodwill  Methods for Goodwill valuation:- 1) Average profit Basis  2)Super profit Basis  3)Capitalizatiom Basis Let's understand the method of valuation of Goodwill with the help of Suitable Example --- Asim and pragati are in equal partnership.They agreed to take Pronoti as an 1/4 th parner. for this it was...

 Today we are discussing about the rules of Debit (Dr.) and Credit (Cr.) of accounts. Debit word comes from the Latin word 'Debitum' and credit words comes from the word 'credere'. Debit and Credit are  two important terms of accountancy. In dual aspect theory ,every transaction has two sides Debit and Credit. Debit and Credit is determined by the following rules  Debit -what comes in Credit -what goes Out   Income - Credit Expenses -Debit For better understanding the rules of Debit and Credit,we can see the following example :- 1) Machinery purchased In cash RS 50000 In the Above transaction , machinery comes in to the business and cash goes out from business , so here MachineryA/c -Debit and Cash A/c-Credit by Rs 50000  2. Land & Building sold to ABC CO. in RS 300000 In the above transaction we can see Cash received against the sales of land & Building, here cash comes into the business and Land & Building goes out from the business. So, CashA...