A brief note on various types of accounts with rule of recording in journal.
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The Golden Rule
Personal Account
Personal account relates to persons with whom a business keeps dealings. A person called be a natural person or a legal person. If a person receives anything from the business, he is called receiver and his account is to debited in the books of the business. If person gives anything to business, he is called as a giver and his account is to be credited in the books of the business.
The Golden Rule for Personal Account is,
Debit the Receiver and Credit the Giver
2. Real Account
Real account relates to property which may either come into the business or go from business. If any property or goods comes into the business, account of that property or goods is to be debited in the books of the business. If any property or goods goes out from the business account of that property or goods is to be credited in the books of business.
The Golden Rule for Real Account is,
Debit What Comes in and Credit What Goes out
The Golden Rule for Nominal Account is,
Debit All Expenses and Loss and Credit all Income and Gains
Personal Account
Personal account relates to persons with whom a business keeps dealings. A person called be a natural person or a legal person. If a person receives anything from the business, he is called receiver and his account is to debited in the books of the business. If person gives anything to business, he is called as a giver and his account is to be credited in the books of the business.
The Golden Rule for Personal Account is,
Debit the Receiver and Credit the Giver
2. Real Account
Real account relates to property which may either come into the business or go from business. If any property or goods comes into the business, account of that property or goods is to be debited in the books of the business. If any property or goods goes out from the business account of that property or goods is to be credited in the books of business.
The Golden Rule for Real Account is,
Debit What Comes in and Credit What Goes out
The Golden Rule for Nominal Account is,
Debit All Expenses and Loss and Credit all Income and Gains
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