Gloden rules of 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 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.
For example, when a company receives cash from a customer, the cash account (real account) is debited, and the accounts receivable account (personal account) is credited.

Accepted Answer

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 and credit all incomes and gains

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