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It covers traditional personal and impersonal accounts, golden accounting rules, and the accounting equation approach with normal balances to decide debit/credit while passing 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2021  \nFOUNDATION LEVEL  \nPAPER 1: PRINCIPLES AND PRATICE OF  \nACCOUNTING  \nFaculty: CA VS Hiranmai  \nCHAPTER 2-ACCOUNTING PROCESS  \n• There are 6 units in total for this chapter  \n• This chapter mainly deals with the basics to the recording, classifying and summarizing steps of accounting.  \n• Recording-As discussed earlier, this is the first step to record the transactions as and when it happens in a separate book called the JOURNAL.  \n• The process of recording the transaction as a first hand information is termed as- Passing an ENTRY.  \n•In an entry-there are 2 sides to the entry which is termed as credit and the other to be debit.  \n•The two sides are termed using the words-Accounts (A/c) .  \n•In general parlance, the term credit and debit means either (+) or (-)  \nUnit 1-Basic accounting proceduresJournal  \n• Accounting works Based on the double entry system of book keeping meaning for every transaction , there will be two accounts identified. One of them will debited and the other will be credited.  \n• Double entry system of Book keeping has been given out by a famous mathematician Luca Pacioli which means that every debit has a corresponding credit.  \n• To identify which has to be debited and which account to be credited we need to go for classification of the accounts.  \n•The accounts- (i.e) identifying from the transaction- for each transaction there will be 2 accounts-the classification of the accounts is important to understand whether an account tobe debited or credited. Classification of accounts can be of two types  \n• Traditional approach  \n• Modern or Accounting equation approach  \n• What ever is the method that is followed the answer will remain the same.  \nUnit 1-Basic accounting proceduresJournal  \n• TRADITIONAL APPROACH  \n• PERSONAL ACCOUNTS-Natural persons, Artificial persons, Representative legal persons  \n• IMPERSONAL ACCOUNTS-Real accounts and nominal accounts.  \n• Accounts which start with the name of the persons is classified as a personal account.  \n• Natural persons refer to the names of debtors, creditors, owner-who are all real people  \n• Artificial persons refer to the name of the companies which are separate entities and not real people.  \n• Representative legal persons refers to the name of the persons to whom something specific payable or receivable-Outstanding, Prepaid, Accrued or advance received.  \n• Examples – Rent outstanding, Commission receivable, Bank account, Bank FD, Creditors, Debtors  \n• GOLDEN RULE OF ACCOUTING-PERSONAL ACCOUNTS-  \n• DEBIT THE RECEIVER AND CREDIT THE GIVER  \nUnit 1-Basic accounting proceduresJournal  \n• Real Accounts refers to those accounts or assets which can be seen, felt and touched. Since they do not involve the name of persons-they are classified under impersonal accounts  \n• Examples are-Land and building, Plant and machinery, Cash, Inventory.  \n• GOLDEN RULE OF ACCOUTING-PERSONAL ACCOUNTS-  \n• DEBIT WHAT COMES IN AND CREDIT WHAT GOES OUT  \n• Nominal Accounts refers to expenses/losses and incomes/gains which are taken in to the Profit and loss accounts. Since they do not involve the name of persons- they are classified under impersonal accounts  \n• Examples are-Rent, electricity, profit on sale of assets.  \n• GOLDEN RULE OF ACCOUTING-PERSONAL ACCOUNTS-  \n• DEBIT ALL EXPENSES AND LOSSES AND CREDIT ALL INCOMESAND GAINS  \nUnit 1-Basic accounting proceduresJournal  \n• Accounting equation approach- Under this approach the entire items in the accounting are classified into the following-  \n• Assets-Which will bring in an economic benefit to the business.  \n• Liabilities-which involves an outflow of money from the business  \n• Capital- refers to the amount contributed by the owner in to the business and it is considered as internal liability of the business towards its owners.  \n• Expenses-Refers to the day to day payments made to maintain the business.  \n• Incomes-Refers to the regular receipt from","cbCaie0RaPwSlkxt","https://ap.wps.com/l/cbCaie0RaPwSlkxt","pdf",462359,15,"English","# Chapter 2 - Accounting Process\n## Overview of recording and journal entries\n## Unit 1 - Basic accounting procedures\n## Traditional approach: personal and impersonal accounts\n## Golden rules of accounting\n## Accounting equation approach and normal balances\n## Steps to pass a journal entry","[{\"question\":\"What is the accounting process covered in Chapter 2 focused on?\",\"answer\":\"It focuses on the basics of recording, classifying, and summarizing steps of accounting, starting from transactions being recorded in a journal.\"},{\"question\":\"How does the double-entry system determine debit and credit?\",\"answer\":\"For every transaction, two accounts are identified—one debited and the other credited—meaning every debit has a corresponding credit.\"},{\"question\":\"What are the main parts of a journal entry?\",\"answer\":\"A journal entry has two sides: debit and credit, represented through accounts (A/c) related to the transaction.\"}]","CHAPTER 2-ACCOUNTING PROCESS - Journal Entry Basics | PDF",38]