What is golden rules of account

Question

Accepted Answer

The golden rules of accounting are a set of principles that guide the recording and reporting of financial transactions.

The first golden rule is the principle of consistency, which states that accounting methods and practices should be applied consistently over time.
The second golden rule is the principle of relevance, which states that financial information should be relevant to the decision-making needs of users.
The third golden rule is the principle of reliability, which states that financial information should be reliable and free from bias or error.
The fourth golden rule is the principle of comparability, which states that financial information should be comparable across different periods and entities.
The fifth golden rule is the principle of understandability, which states that financial information should be presented in a clear and understandable manner.
For example, if a company consistently uses the accrual method of accounting, it should continue to use this method in the future to maintain consistency.
Relevant financial information would include data on sales, expenses, and profits, which can help managers make informed decisions.
Reliability can be achieved through proper documentation, accurate record-keeping, and independent verification of financial information.
Comparability allows users to analyze and compare financial statements of different companies or periods to identify trends or patterns.
Understandability can be enhanced through the use of clear and concise financial reports, avoiding technical jargon or complex terminology.

Accepted Answer

There are three types of rules real, personal nominal
1-Real account: debit what comes in credit what's goes out.
2- nominal: debit all expenses and losses credit all income and gains
Personal: debit the receiver credit the giver

What is golden rules of account

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