Analyse the following transactions, state the nature of accounts and the account that will be debited and credited as per the Traditional approach:
1. Dinesh started from Naresh Rs. 5,00,000.
2. Borrowed from Naresh Rs. 1,00,000.
3. Pruchased furniture for Rs 20,000 in cash from Raj Furniture House.
4. Pruchased furniture from Delhi Safe for Rs. 40,000.
5. Pruchased goods for cash Rs. 15,000.
6. Purchased goods from Mahesh Rs. 30,000.
7. Sold goods for cash to Karim Rs. 25,000.
8. Sold goods to Shyam on credit Rs. 30,000.
9. Cash received from Shyam Rs. 20,000.
10. Cash paid to Mahesh Rs. 10,000.

Explanation

ANALYSIS OF TRANSACTIONS

1.Purchases Account is used for purchase of goods for resale and not for purchase of asset.
2. In cash purchases, the seller's name is not relevant. Hence, it is not considered. Similarly in cash sales, the purchaser's name is not relevant. Hence, it is not considered.
3.Sales means selling the goods which forms part of stock-in-trade of the business. Sale of old assets is not 'sale' in the accounting.