Special-Introduction-of-Some-Accounts by Jameel Attari

Special Introduction of Some Accounts


Drawings Account

  • When the owner of the business withdraws goods or cash from the business for his personal use, a Drawing Account is opened in the books for the same.
  • This account is called Personal Account.

Stock account

  • The thing in which the trader trades is called goods. This is a real (material) account.


  • When a trader charges less than the full price of that item from his customers. So it is called exemption or deduction.

Trade Discount

  • The discount given by the trader increases his sales.
  • It is called a trade discount. Its rate is different for different traders.
  • This discount is given at the rate of a certain percentage of the selling price.
  • It is not accounted for in the books. This reduces the number of sales.
  • Example- Sold goods worth Rs.5000 to Saddam and gave him 10% business discount, in this transaction Rs.500 will be deducted from Rs.5000. And Rs 4500 will be accounted for in the books.

Cash Discount

  • This discount is given by the trader to get early payment from the debtors. Its account is written in books.
  • Similarly, if a merchant pays his creditors in full on time, he receives a cash discount.
  • If the trader receives a cash discount then there is profit for the business and if he gives a cash discount then there is a loss for the business.
  • This is a nominal account only.

Bad Debts

  • When the debtor of a merchant becomes insolvent and the amount not received is called bad debt.
  • This is a loss for the merchant.
  • The amount which is not received will debit from the bad debt account with the same amount and credited to the personal account of the debtor.
  • Bad debts account is a nominal account.


  • When the owner of the business takes out goods or money from the business to meet his personal needs, it is called drawing.

Raw Material

  • When goods are bought in business to produce a particular item, it is called raw material.

Opening Stock

  • The goods remaining unsold at the end of the previous financial year are called opening stock.

Closing Stock

  • The goods that remain unsold at the end of a financial year are called closing stock.


  • Those to whom we sell goods on credit are called trade debtors.


  • Those from whom we buy goods on credit are called trade creditors.

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