Golden rules of accounts

Question

Accepted Answer

Golden rules of accounts refer to basic principles of accounting that must be followed for accurate financial reporting.

The first golden rule is to maintain accurate records of all financial transactions.
The second golden rule is to ensure that all transactions are recorded in the correct accounting period.
The third golden rule is to ensure that all transactions are recorded in the correct account.
The fourth golden rule is to ensure that all transactions are recorded at their actual value.
The fifth golden rule is to ensure that all financial statements are prepared in accordance with the relevant accounting standards.
For example, if a company purchases inventory on credit, the transaction should be recorded in the accounts payable account at the actual cost of the inventory.
Another example is that all financial statements should be prepared in accordance with Generally Accepted Accounting Principles (GAAP).

Accepted Answer

Personel account real account nominal account

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