Commercial StudiesICSE Class 9 · Journal

Journal Format, Classification of Accounts and the Rules of Debit and Credit (ICSE Class 9)

Updated 18 October 2026 · Fact-checked

The journal is the book of original entry in which transactions are first recorded in date order with the account debited, the account credited, the amounts and a narration. Accounts are personal, real or nominal. By the golden rules, debit the receiver and credit the giver for a personal account, debit what comes in and credit what goes out for a real account, and debit expenses and losses and credit incomes and gains for a nominal account.

Understand Journal Format, Classification of Accounts and the Rules of Debit and Credit

The journal. The word comes from the French jour, meaning day. The journal is the book in which transactions are first recorded in date order, showing the accounts to be debited and credited, the amounts and a short explanation. It is the book of original (prime) entry, and recording in it is journalising.
Format (five columns): Date | Particulars | L.F. | Debit (Rs) | Credit (Rs). The debited account is written first, followed by Dr; the credited account is written on the next line, indented, beginning with To; the narration (Being ...) is written below in brackets; L.F. (ledger folio) is filled when the entry is posted. The year and month are written at the top of the date column.

Classification of accounts.
1. Personal accounts: natural persons (Mohan A/c), artificial persons such as a bank, a company or a club, and representative personal accounts such as Outstanding Salaries A/c and Prepaid Insurance A/c. Capital and Drawings are personal accounts of the owner.
2. Real accounts: things owned by the business, tangible (cash, furniture, machinery, building, stock) or intangible (goodwill, patents). Purchases and Sales accounts record goods and are usually treated alongside real accounts.
3. Nominal accounts: expenses, losses, incomes and gains (Rent A/c, Salaries A/c, Commission Received A/c).

Golden rules (traditional).

Personal account: debit the receiver, credit the giver.
Real account: debit what comes in, credit what goes out.
Nominal account: debit all expenses and losses, credit all incomes and gains.

Modern rules (accounting equation). Assets: increase on the debit side, decrease on the credit side. Liabilities: increase on the credit, decrease on the debit. Capital: increase on the credit, decrease on the debit. Revenues and gains: increase on the credit. Expenses and losses: increase on the debit. Drawings (reduce capital): debit. Both approaches always give the same entry.

Four-step method. (1) Find the two accounts affected. (2) Classify each. (3) Apply the rule to find which is debited and which credited. (4) Write the entry with date, Dr, To, amounts and narration.

Only simple entries (one debit and one credit) are covered in Class IX; compound entries, cash discount, bad debts, and opening and closing entries are not.

Neighbouring topics: writing journal entries for common simple transactions is on the next page of this chapter.

Journal Format, Classification of Accounts and the Rules of Debit and Credit: key facts

Golden rules: Personal debit the receiver, credit the giver
real debit what comes in, credit what goes out
nominal debit expenses and losses, credit incomes and gains; Traditional approach.
Modern rules: Assets and expenses increase by debit
liabilities, capital and revenue increase by credit
drawings debit; Equation approach.
Journal columns: Date
particulars
L.F.
debit
credit; Narration below each entry.

Personal	debit the receiver, credit the giver
real	debit what comes in, credit what goes out
nominal	debit expenses and losses, credit incomes and gains

Assets and expenses	increase by debit
liabilities, capital and revenue	increase by credit
drawings	debit

Journal Format, Classification of Accounts and the Rules of Debit and Credit in real life

The idea, met in an everyday situation. Answer the question in your own words, then compare with the model answer. The one-line hook is what to remember.

Rent paid in cash

Suppose a shopkeeper pays the monthly rent of Rs 6,000 in cash.

Which accounts are affected, of what kind, and which is debited?

Try it first, then show the solutionSolution

Rent A/c is a nominal account (an expense): debit.
Cash A/c is a real account (it goes out): credit.
Entry: Rent A/c Dr 6,000; To Cash A/c 6,000.

Answer: Rent A/c is debited as an expense and Cash A/c is credited as it goes out.

Memory hook: Expenses debit, going out credits.

Tricks to remember Journal Format, Classification of Accounts and the Rules of Debit and Credit

Short memory aids. Say each one aloud once, then use it on a question the same day.

Receiver debit, giver credit
Personal accounts: the one who receives is debited.
Use it when: Personal accounts.
In debit, out credit
Real accounts: what comes in is debited and what goes out is credited.
Use it when: Real accounts.
Expenses debit, incomes credit
Nominal accounts: losses and expenses are debited.
Use it when: Nominal accounts.

Journal Format, Classification of Accounts and the Rules of Debit and Credit: solved examples

Ordered from board level to HOTS. Try each one before you open the solution.

Example 1: Another name · 1 mark · MCQBoard level

The journal is also known as the:
(a) principal book (b) book of original entry (c) book of final entry (d) cash book

Try it first, then show the solutionSolution

Transactions are first recorded in the journal.

Answer: (b) book of original entry

Example 2: Classify the accounts · 3 marks · Short answerHarder board level

Classify each account as personal (natural, artificial or representative), real or nominal: (i) Machinery A/c; (ii) Salaries A/c; (iii) Ravi A/c; (iv) Outstanding Rent A/c; (v) Bank A/c; (vi) Commission Received A/c.

Try it first, then show the solutionSolution

(i) Real. (ii) Nominal. (1 mark)
(iii) Personal, natural. (v) Personal, artificial. (1 mark)
(iv) Personal, representative. (vi) Nominal. (1 mark)

Answer: (i) real (ii) nominal (iii) personal natural (iv) personal representative (v) personal artificial (vi) nominal

Example 3: Apply the golden rules · 3 marks · Short answerHarder board level

State the account debited and the account credited with the rule: (i) wages paid in cash; (ii) goods purchased on credit from Seema; (iii) cash received from the debtor Rohan.

Try it first, then show the solutionSolution

(i) Wages A/c (nominal, expense) is debited; Cash A/c (real, goes out) is credited. (1 mark)
(ii) Purchases A/c (goods come in) is debited; Seema A/c (personal, the giver) is credited. (1 mark)
(iii) Cash A/c (comes in) is debited; Rohan A/c (personal, the giver) is credited. (1 mark)

Answer: (i) Wages Dr, Cash Cr (ii) Purchases Dr, Seema Cr (iii) Cash Dr, Rohan Cr

Example 4: Case study: machinery bought by cheque · 4 marks · Case-basedHOTS / competency

A trader buys machinery for Rs 80,000 and pays by cheque on 5 March.
(i) Name the two accounts affected. (1)
(ii) Classify them by the traditional and the modern approach. (1)
(iii) State which is debited and credited and write the journal entry with narration. (2)

Try it first, then show the solutionSolution

(i) Machinery A/c and Bank A/c.
(ii) Traditional: Machinery is real (comes in); Bank is personal (artificial) and the giver. Modern: Machinery is an asset (increases) and Bank is an asset (decreases).
(iii) Machinery A/c Dr 80,000; To Bank A/c 80,000 (Being machinery purchased by cheque).

Answer: Machinery A/c Dr 80,000; To Bank A/c 80,000 (Being machinery purchased by cheque).

Example 5: Correct the entry · 3 marks · Short answerHarder board level

A student writes: Sales A/c Dr 12,000; To Cash A/c 12,000 (Being goods sold for cash). Find the error, give the correct entry and explain it using the golden rules.

Try it first, then show the solutionSolution

The debit and credit are reversed. (1 mark)
Correct entry: Cash A/c Dr 12,000; To Sales A/c 12,000 (Being goods sold for cash). (1 mark)
Cash comes in (real: debit what comes in) and goods go out (credit Sales). (1 mark)

Answer: Cash A/c Dr 12,000; To Sales A/c 12,000 (Being goods sold for cash).

Where students lose marks in Journal Format, Classification of Accounts and the Rules of Debit and Credit

The slips examiners see most often, and what to write instead.

Mistake: Reversing the entry
Debit and credit are mixed.
Wrong working
Sales A/c Dr, To Cash A/c for a cash sale
Right working
Cash A/c Dr, To Sales A/c
Do this: Apply the rule for each account.
Usually costs: 2 marks
Mistake: Missing narration
The Being line is forgotten.
Wrong working
Entry without narration
Right working
(Being goods sold for cash)
Do this: Write the narration in brackets.
Usually costs: 1 mark
Mistake: Calling Bank a real account
Bank holds cash.
Wrong working
Bank A/c is real
Right working
Bank A/c is personal (artificial)
Do this: The bank is an artificial person.
Usually costs: 1 mark

Exam tips

Rule the five columns neatly and indent the To line.
Write the narration for every entry.
State the account type before applying the rule.
Quote the golden rule in explanation questions.

Practice questions on Journal Format, Classification of Accounts and the Rules of Debit and Credit

Write each answer on paper first. Open the hint only if you are stuck, and the answer only when you have finished.

Q1 · 1 mark · MCQBoard level
Rent A/c is a:
(a) real account (b) personal account (c) nominal account (d) representative account
Hint
An expense account.
Answer
(c) nominal account
Q2 · 2 marks · Very short answerBoard level
What does L.F. mean in the journal?
Hint
Ledger.
Answer
L.F. is the ledger folio: the page of the ledger to which the entry is posted, filled at the time of posting.
Q3 · 3 marks · Short answerHarder board level
Using the modern rules, state whether each is debited or credited when it increases: (i) Capital; (ii) Debtors; (iii) Salaries expense.
Hint
Assets and expenses are debited.
Answer
(i) Capital is credited. (ii) Debtors (an asset) are debited. (iii) Salaries (an expense) is debited.
Q4 · 3 marks · Short answerHarder board level
State the type of account and whether it is debited or credited when it decreases: (i) Creditors; (ii) Cash; (iii) Drawings.
Hint
Opposite of the increase rule.
Answer
(i) Creditors (liability): debited when it decreases. (ii) Cash (asset): credited. (iii) Drawings: credited when it decreases (it increases by debit).
Q5 · 3 marks · Short answerHOTS / competency
The owner takes goods worth Rs 2,500 from the shop for personal use. Explain why Drawings A/c is debited and Purchases A/c credited.
Hint
Drawings reduce capital; goods go out.
Answer
Drawings reduce the owner's capital and increase by debit, so Drawings A/c is debited. The goods go out of the business, and since they are dealt in, Purchases A/c is credited.

Test your recall

Answer in your head or on paper first, then open the card. Pulling an answer out of memory makes it stick far better than re-reading.

1.Rule for a personal account?Show answer
Debit the receiver, credit the giver.
2.Rule for a real account?Show answer
Debit what comes in, credit what goes out.
3.Rule for a nominal account?Show answer
Debit expenses and losses, credit incomes and gains.
4.Is Capital a personal account?Show answer
Yes, of the owner.
5.What is a narration?Show answer
The short explanation of an entry.
6.Are compound entries in Class IX?Show answer
No.

Journal Format, Classification of Accounts and the Rules of Debit and Credit: frequently asked questions

Which approach should I use?

Both give the same entry; use the one taught in your school and state the rule.

Why is the bank a personal account?

The bank is an artificial person with whom the business deals.

Are Purchases and Sales real accounts?

They record goods and are usually treated alongside real accounts.