basic rules of accounts
TRADITIONAL Approach 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
Credit all incomes and gains
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