Golden rules of accounting with examples: The Accounting system can be bifurcated by three accounts namely Personal Account, Real Account and Nominal Account. Personal account again consists debit balance – assets, credit balance – assets.Real Account consists Debit Balance- assets, Nominal Account consists Debit Balance – Expenses / Loss and Credit Balance – Income/Gains
Golden Rules Of Accounting With Examples:
1. Personal Account
Debit Balance – Assets
Credit Balance – Liability1.Personal Account
2.Real Account
Debit Balance – Assets
3.Nominal Account
Debit Balance – Expenses / Loss
Credit Balance – Income / Gains
By understanding simple Techniques of the three accounts Any Transaction can be Accounted.
First, let us know what is the meaning features and the rules of accounting
Personal Account :
In this account, the natural and artificial personal are included.The transactions related to persons are included in this account includes representative personal account also
Example: Natural person: Ram a/c, Shyam A/c etc
Artifical Person: Andhra Bank a/c
ABC & CO A/C
MNC ltd a/c
Representative personal: Outstanding Expenses
Golden Rules
Debit: Receiver
Credit: Given
Example: Mr. Hareesh and Mrs. Sandhya are dealers in trading Mr.Hareesh sold 20000 worth goods to by the above transactions.In Hareesh Business Mrs. Sandhya is a receiver of goods so, she will be debited and in Mrs. Sandhya business.Mr.Hareesh will be credited as he is a giver.
Real Account:
In this accounts, assets of the firm are dealt with. But not debt ex: cash Machine etc.
Golden Rules
Debt: comes in
credit: goes out
Example: Mrs. Sravani sold Furniture wroth 25000 to Mr.Bhargav enterprises. By the above transaction (In Sravani Business) furniture is going out from Sravani so it is to be credited> But cash is coming in so cash will be debited.
Nominal Account :
This account deal with the expenses, incomes, gain, and loss of the Business. Therefore this account will never be balanced. This account will be transferred. to Balance sheet / Trial Balance.
Ex: Manufacturing expenses
Selling cost etc
Golden rules
Debit; Expenses and losses
Credited: Incomes and Gains
Examples: 1.In Praveen Entreprisesan income of 20000 transacted so, 20000 will be credited in Praveen Business.
2.In pavan and co loss of 10000 due to theft accrued so, the loss of 10000 will be debited
golden rules of accounting with examples:
| Cash A/C | Real A/C | Debit Balance | Asset |
| Furniture a/c | Real A/c | Debit Balance | Asset |
| Capital a/c | Personal A/c | Credit Balance | Liability |
| Bank a/c | Personal A/c | Debit Balance | Asset |
| Purchase a/c | Real A/c | Debit Balance | Expenditure |
| Suresh a/c | Personal A/c | Credit Balance | Liability |
| Sales a/c | Real A/c | Credit Balance | Income |
| X a/c | Personal A/c | Debit Balance | Asset |
| Drawings a/c | Personal A/c | Debit Balance | Asset |
| Machinery a/c | Real A/c | Debit Balance | Asset |
| Commision a/c | Nominal A/c | Credit Balance | Income |
| Rent a/c | Nominal A/c | Debit Balance | Expenditure |
| Salaries a/c | Nominal A/c | Debit Balance | Expenditure |
| Wages a/c | Nominal A/c | Debit Balance | Expenditure |