In recording various business transactions in the journal, the most important aspect is the entry in the 'Particulars' column. Any mistake in this regard would lead to incorrect accounting.

Hence, you should analyze the transaction carefully before making such entries. The following steps shall help you to do such analysis.

1. Take up the transaction, one by one. Read and analyze the transaction carefully from the business entity point of view, and identify the two accounts that are being affected by the transaction.
2. You are aware that accounts have been classified as personal, real and nominal accounts. Hence, after identifying the two accounts that are affected by the transaction, you must determine, in respect of each account, whether it is a personal account or a real account or a nominal account.
3. Each class of account has its own rule of debit and credit, which you have already learnt in the previous unit. Now, apply the relevant rules and decide which account is to be debited and which is to be credited.

Sold goods to Saran Brothers on credit for Rs. 500 on January 3, 1987

• Step 1: From the business point of view, it is a sale of goods on-credit. In this case the receiving aspect is Saran Brothers (as they receive the goods) and the giving aspect is Goods (as goods go out). So, the two accounts affected are 'Saran Brothers' Account' and 'Goods Account'.
• Step 2: The next step is to classify the accounts identified in the Step 1. You are aware that Saran Brothers' Account is a personal account because it relates to persons, and Goods Account is a real account as it relates to property of the business.
• Step 3: The rule for personal accounts is 'debit the receiver and credit the giver’. Saran Brothers receive the goods. So, Saran Brothers' Account will be 'debited'. The rule for real accounts is 'debit what comes in and credit what goes out'. Goods go out of business. So, Goods Account will be credited.