Question

Define Golden Rule of Accountancy withe examples.

Answer 1

Golden Rules of Accounting

Personal Account

Debit the Receiver, Credit the Giver

Real Account

Debit what comes in, Credit what goes out

Nominal Account

Debit all expenses and losses, Credit all incomes and gains

Example

Commenced business with cash Rs. 5,00,000

example 1

Purchased goods from Alex Rs. 25,000

example 2

Sold goods worth Rs. 10,000 to Sam for cash

example 3

Office Rent paid Rs. 12,000

example 4

The Golden rules of Accounting are the mainstay of the entire process of accounting. These are the rules for debit and credit, that helps in the preparation and presentation of financial statement in a systematic manner.

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