Rangunwala Academy
Understand Accounting Through Logic
Clear, practical accounting education for beginners, commerce students and teachers—built around reasoning instead of memorisation.
A clearer foundation for debit and credit
Rangunwala Academy explains the foundations of double-entry accounting through a consistent identification process: understand the transaction, identify at least two accounts, classify each account, apply the relevant rule, determine the amount and pass the journal entry.
Personal Accounts
Debit: receiver or receivable from them.
Credit: giver or payable to them.
Real Accounts
Debit: property comes in or its value increases.
Credit: property goes out or its value decreases.
Nominal Accounts
Debit: all expenses and losses.
Credit: all incomes and gains.
Worked example: from credit purchase to final settlement
This connected example shows how one supplier balance changes across a credit purchase, a purchase return and a final payment with discount received.
| Transaction | Account logic | Journal entry |
|---|---|---|
| Purchased goods on credit from Mehta Traders ₹25,000 | Purchases increase; amount payable to supplier increases | Purchases A/c Dr. ₹25,000 To Mehta Traders A/c ₹25,000 |
| Returned goods to Mehta Traders ₹4,000 | Supplier liability falls; Purchase Returns increase | Mehta Traders A/c Dr. ₹4,000 To Purchase Returns A/c ₹4,000 |
| Paid ₹20,500 in full settlement and received ₹500 discount | Remaining payable ₹21,000 is cleared by Cash ₹20,500 plus Discount Received ₹500 | Mehta Traders A/c Dr. ₹21,000 To Cash A/c ₹20,500 To Discount Received A/c ₹500 |
| Control check | Total Debit ₹50,000 = Total Credit ₹50,000 | |
Why the settlement entry is ₹21,000
The original ₹25,000 payable falls by the ₹4,000 return, leaving ₹21,000. Paying ₹20,500 and receiving a ₹500 discount clears that balance exactly. Learn the full method in Transaction Identification, then practise the format in Journal Entries Step by Step.
Original educational work
The article Modification in the Golden Rules for Debiting & Crediting the Accounts in Double Entry Accounting System for Better Understanding is a copyright-registered work by Ejaj Abubakar Rangunwala. The article page includes the official registration details and practical examples.
Learn ACCOUNTING LOGIC SYSTEM™ step by step
Follow the complete beginner pathway in order. Each lesson includes clear logic, worked examples and practice support.
1. Types of Accounts
Identify Personal, Real and Nominal Accounts correctly.
2. Debit and Credit
Understand the meaning of debit and credit through logic.
3. Transaction Identification
Apply the account-identification process before recording.
4. Journal Entries
Convert transaction analysis into balanced journal entries.
5. Ledger and Posting
Post entries using To and By, then balance each account.
6. Trial Balance
Bring verified ledger balances into one control statement.
7. Final Accounts
Prepare Trading, Profit and Loss and Balance Sheet statements.
Learning Hub
Open the complete ACCOUNTING LOGIC SYSTEM™ learning roadmap.
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Rangunwala Academy · Logic-based accounting and commerce education · Author: Ejaj Abubakar Rangunwala