what is golden rules for accounting?

Question

Accepted Answer

The golden rules of accounting are basic principles that guide the recording of financial transactions.

The first golden rule is the Debit/Credit rule, which states that for every transaction, there must be at least two accounts involved, with one account debited and another account credited.
The second golden rule is the Real/Personal/Nominal rule, which categorizes accounts into three types: real accounts (assets and liabilities), personal accounts (individuals and organizations), and nominal accounts (revenues, expenses, and gains/losses).
The third golden rule is the Separate Entity rule, which states that the business entity's financial transactions should be recorded separately from the personal transactions of its owners.
The fourth golden rule is the Cost Principle, which requires that assets be recorded at their original cost and not their current market value.
The fifth golden rule is the Matching Principle, which states that expenses should be recognized in the same period as the revenues they help generate.
The sixth golden rule is the Revenue Recognition Principle, which states that revenue should be recognized when it is earned, regardless of when the payment is received.
The seventh golden rule is the Full Disclosure Principle, which requires that all relevant and material information be disclosed in the financial statements and accompanying notes.
The eighth golden rule is the Consistency Principle, which states that accounting methods and practices should be consistent over time to ensure comparability of financial information.
The ninth golden rule is the Materiality Principle, which allows for the omission or misstatement of insignificant information that would not affect the decision-making of users of the financial statements.
The tenth golden rule is the Conservatism Principle, which advises accountants to err on the side of caution and record potential losses or expenses immediately, but only record potential gains or revenues when they are realized.

Accepted Answer

1) personal account 2) real account 3) nominal account

what is golden rules for accounting?

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