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

For any further doubts, do get back to us. We assure you our help.
Keep studying and keep posting!!

  • 22
What are you looking for?