Golden rules of Accounting

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

The first golden rule is to maintain a record of all financial transactions.
The second golden rule is to maintain a separate record for each account.
The third golden rule is to ensure that the debit and credit entries are equal.
These rules help in maintaining accuracy and consistency in accounting.
For example, if a company purchases inventory on credit, the transaction should be recorded in the inventory account and the accounts payable account.
Similarly, if a company receives cash for sales, the transaction should be recorded in the cash account and the sales account.
By following these golden rules, companies can ensure that their financial statements are accurate and reliable.

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