Question

d 9. What are the rules of Debit and Credit under Traditional Approach ?​

Answer 1

Answer:

Rules for Debit and Credit under the Traditional Approach

Personal Account Debit the Receiver; Credit the Giver

Real Account Debit what comes in; Credit what goes out

Nominal Account Debit all expenses/losses; Credit all income/gains

Answer 2

ANSWER :

❒ The rules of Debit and Credit of three types of accounts under English Approach or Traditional Approach are as follows :-

• [1] Personal Accounts : Accounts heads pertaining to persons, firms, companies, organizations etc. are called Personal Accounts. For example : Ram's A/C, Gauhati Commerce College A/C etc.

❍ Rules for Debit and Credit :

• ★ Debit is the Receiver of the benefit.

• ★ Credit is the Giver of the benefit.

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• [2] Real Accounts : Accounts heads recording transactions relating to tangible things are known as Real Accounts. For example : Machinery A/C, Cash A/C, Building A/C, Bank A/C etc.

❍ Rules for Debit and Credit :

• ★ Debit what Comes in.

• ★ Credit what Goes out.

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• [3] Nominal Accounts : Accounts heads recording transactions relating to losses, expenses, incomes and gains are known as Nominal Accounts. For example : Wages A/C, Rent A/C, Salaries A/C, Miscellaneous Expense A/C etc.

❍ Rules for Debit and Credit :

• ★ Debit all Expenses and Losses.

• ★ Credit all Incomes and Gains.