Golfen rules of accounting

Question

Accepted Answer

The Golden Rules of Accounting are the basic principles that guide the accounting process.

The first rule is the Debit and Credit rule, which states that for every debit entry, there must be a corresponding credit entry.
The second rule is the Real Account rule, which states that all assets and liabilities have a debit and credit balance respectively.
The third rule is the Nominal Account rule, which states that all revenue and expenses have a debit and credit balance respectively.
These rules help ensure accuracy and consistency in financial reporting.
For example, if a company purchases inventory on credit, the Debit and Credit rule would require a debit entry to inventory and a credit entry to accounts payable.
Similarly, if a company earns revenue from sales, the Nominal Account rule would require a debit entry to cash and a credit entry to sales revenue.

Top Conduent Associate Accountant interview questions & answers