Rules of Debit and Credit: Personal A/c MCQs Quiz | Class 9
This quiz is for Class IX students studying Elements of Book-Keeping & Accountancy (Code 254). It covers Unit 3: Nature of Accounts & Rules for Debit and Credit, focusing on the golden rule for Personal Accounts: Debit the receiver; credit the giver. Attempt all questions and click submit to see your score and download the answer PDF.
Understanding the Rule for Personal Accounts
In accountancy, every transaction involves at least two accounts. The ‘Golden Rules of Accounting’ provide a foundation for recording these transactions correctly. For Personal Accounts, the rule is simple and logical: Debit the Receiver, Credit the Giver. This rule helps us determine which personal account should be debited and which should be credited in a transaction.
What are Personal Accounts?
Personal accounts are related to persons or entities with whom the business has dealings. These can be individuals (like Ram’s A/c), firms (like M/s Sharma & Sons), companies, or institutions (like a Bank A/c or a creditor’s A/c). They are broadly classified into three types:
- Natural Personal Accounts: Accounts of human beings, e.g., Ramesh’s A/c, Sunita’s A/c.
- Artificial Personal Accounts: Accounts of business entities, firms, or institutions, e.g., Tata Steel Ltd. A/c, Delhi University A/c, ABC Bank A/c.
- Representative Personal Accounts: Accounts that represent a person or a group of persons, e.g., Outstanding Salary A/c (represents employees to whom salary is due), Prepaid Rent A/c (represents the landlord to whom rent is paid in advance).
Key Concept 1: Debit the Receiver
This part of the rule states that whenever a person or entity receives something from the business (like cash, goods, or any other asset), their account should be debited. The person is the “receiver” of the value.
Example: “Paid Rs. 5,000 to Suresh.”
- Identify the accounts: Cash A/c (Real Account) and Suresh’s A/c (Personal Account).
- Apply the rule: Suresh is the person receiving the cash. Therefore, as per the rule “Debit the Receiver,” Suresh’s account will be debited.
- Journal Entry: Suresh’s A/c Dr. 5,000; To Cash A/c Cr. 5,000.
Key Concept 2: Credit the Giver
This part of the rule states that whenever a person or entity gives something to the business, their account should be credited. The person is the “giver” of the value.
Example: “Received Rs. 2,000 from Mohan.”
- Identify the accounts: Cash A/c (Real Account) and Mohan’s A/c (Personal Account).
- Apply the rule: Mohan is the person giving the cash to the business. Therefore, as per the rule “Credit the Giver,” Mohan’s account will be credited.
- Journal Entry: Cash A/c Dr. 2,000; To Mohan’s A/c Cr. 2,000.
| Transaction Type | Person’s Role | Rule Applied | Action |
|---|---|---|---|
| Cash paid to a person | Receiver | Debit the Receiver | Debit the person’s account |
| Cash received from a person | Giver | Credit the Giver | Credit the person’s account |
| Goods sold to a person on credit | Receiver (of goods) | Debit the Receiver | Debit the person’s account |
| Goods purchased from a person on credit | Giver (of goods) | Credit the Giver | Credit the person’s account |
Quick Revision Points
- The rule for Personal Accounts is “Debit the Receiver, Credit the Giver”.
- This rule applies to individuals, firms, and institutions.
- The ‘receiver’ is the one who gets a benefit from the business.
- The ‘giver’ is the one who provides a benefit to the business.
- Capital Account is a Personal Account representing the owner, who is a ‘giver’ to the business. Hence, it is credited.
- Drawings Account is a Personal Account representing the owner, who is a ‘receiver’ from the business. Hence, it is debited.
Extra Practice Questions
- Journalise the transaction: “Started business with cash Rs. 1,00,000”. Which account will be credited?
- If goods worth Rs. 10,000 are purchased from M/s Gupta Traders on credit, what will be the journal entry?
- What entry is passed when Rs. 5,000 is withdrawn by the proprietor for personal use?
- A loan of Rs. 50,000 is taken from Punjab National Bank. Which account will be credited?
- Sold old furniture to Mr. Verma for Rs. 8,000 on credit. Which account should be debited?
