basic rules of accounts

Hi Harsh,

TRADITIONAL Approach ‚Äč categorise the accounts into three types:
1)Personal accounts: persons such as individual, group of persons etc. For Example, Bank A/c, Creditor A/c, Debtor A/c, ABC and Co. etc

Rule:- Debit the Receiver

Credit the giver 
 

2)Real account: tangible or intangible assets. For Example, Machinery A/c, Goodwill A/c, etc

Rule: Debit what comes in

Credit what goes out 
 

3) Nominal accounts: these are expenses and incomes. For Example, discount received, discount allowed, etc 

Rule:- Debit all expenses and losses

Crediall incomes and gains

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