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 golden rules include the principles of debit and credit, which determine how transactions are recorded in the accounting system.
The three golden rules are: 1) Debit what comes in, credit what goes out; 2) Debit all expenses and losses, credit all incomes and gains; 3) Debit the receiver, credit the giver.
For example, when a company receives cash from a customer, it would debit the cash account (what comes in) and credit the accounts receivable account (what goes out).
Similarly, when a company pays for expenses, it would debit the expense account (what goes out) and credit the cash account (what comes in).
These rules ensure that the accounting equation (Assets = Liabilities + Equity) remains in balance and provide a framework for accurate financial reporting.

Accepted Answer

Personal account Debit the receiver credit the giver
Real account Debit what comes in credit what goes out
Nominal account Debit expenses and losses credit incomes and gains

What are the golden rules of accounting

Top HR questions asked in Parle Products FTC Supervisor