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Can you help me understand the golden rules of accounting?

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Question added by suleman anjum , Accounts and Finance Executive , Paksolarcells Pvt. ltd
Date Posted: 2013/11/13

Mr Khalid Noor did a good and simple answer , I agree with him

Khalid Noor
by Khalid Noor , Accounting Manager , FedEx

The traditional rule of accounting which some people refers as the "Golden Rule of Accounting" is here below:

1: debit the receiver (debtor) and credit the giver (Creditor), 2: debit what comes in and credit what goes out and 3: debit all expense and loss and credit all income and gains.

 

 

The complete details of this rule can be found in Classical books of Accounting (FRANKWOOD Theory of Accounting, Meigs & Meigs ACCOUNTING)

Aziz ur Rehman ur Rehman
by Aziz ur Rehman ur Rehman , Assistant Manager Finance , Central Power Puchasing Agency (CPPA)

debit all those which you have

Credit all those to whom you give all these 

for example

sale50 units @1 each in cash

now you have cash  so debit it  "Cash account"  by50

cash given by sale  so credit it "Sale account"    by50

 

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Moses Ajayi Murorun
by Moses Ajayi Murorun , Production Executives , Various Organizations

The golden rules in accounting is siply been refers to as the princple of double entry, that is ever debit entry must have a correspont credit entry whis is simply put , DEBIT THE RECEIVER & CREDIT THE GIVER ACCOUNTS  exmple pay cash into bank $500

Debit Bank account $500

Credit Cash Account $500

suleman anjum
by suleman anjum , Accounts and Finance Executive , Paksolarcells Pvt. ltd

can i simply say that

  1. All debits in increase in Assets,Expenses and loses while as decreses in Liabilities,incomes and gains
  2. All Credits in Decrease in Assets,Expenses and loses while as Increases in Liabilities,incomes and gains

mohammed shafi ur rahman mohammed
by mohammed shafi ur rahman mohammed , Senior Accountant , Remix Tech LLC

The Golden rules of accounting is classification of accounts in three groups 

1. Real Account : debit what comes in , credit what goes out 

2. Personal account : debit the receiver , credit the giver

3. Nominal account : debit all expenses and losses , credit all incomes and gains

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