Golden Rules of Accounting
To grasp these rules, we must study them separately and in their right context. First, let us know -
Personal Account
Personal accounts are associated with individuals, companies,, and so on. Debtors, creditors, customer accounts, goods supplier accounts, and so on are all examples.
The Accounting rule of the Personal Account
“Debit the receiver, Credit the giver”
Real Account
A real Account is a collection of tangible characteristics of an organization such as furniture, money, and so on.
The Accounting rule of the Real Account
“Debit what comes in, credit what goes out”
Nominal Accounts
Nominal accounts are those accounts that deal with expenditures, losses, income, or gains.
The Accounting rule of the Nominal Account
“Debit all expenses and losses, credit all incomes and gains”