Golden rules of accounting

Question

Accepted Answer

The golden rules of accounting are fundamental principles that guide the recording of financial transactions.

The first golden rule is the Personal Account rule, which states that debit the receiver and credit the giver.
The second golden rule is the Real Account rule, which states that debit what comes in and credit what goes out.
The third golden rule is the Nominal Account rule, which states that debit all expenses and losses and credit all incomes and gains.
These rules ensure accurate and consistent recording of financial transactions.
For example, if a company receives cash from a customer, the Personal Account rule would debit the cash account and credit the customer's account.

Accepted Answer

Debit the receiver

Credit the giver

Debit what comes in

Credit what goes out

Debit all expenses and losses

Credit all incomes and gains

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