What are the golden rules of accounting?

Question

Accepted Answer

The golden rules of accounting are fundamental principles that guide the recording and reporting of financial transactions.

The first golden rule is the Personal Account rule, which states that all personal accounts are debited for the receiver and credited for the giver.
The second golden rule is the Real Account rule, which states that all real accounts are debited for what comes in and credited for what goes out.
The third golden rule is the Nominal Account rule, which states that all nominal accounts are debited for expenses and losses and credited for incomes and gains.
These rules ensure accurate and consistent recording of financial transactions and help maintain the integrity of financial statements.
For example, when a company receives cash from a customer, the Personal Account rule dictates that the customer's account is debited (increased) and the Cash account is credited (increased).

Accepted Answer

PERSONAL ACCOUNT: Debit the Reciever and credit the Giver

REAL ACCOUNT: Debit what come in and Credit what goes out

NOMINAL ACCOUNT :Debit : All expenses and loss and Credit :income and gains

Top Citicorp Hardware Analyst interview questions & answers