Golden rules of accounting...

Debit and Credit

When we speak about accounting, first thing that comes into our mind is 'Debit and Credit'.

There was a famous quote by an unknown author. Summary of that quote is "an accountant is a person who knows what to debit and what to credit.

Debit and credit are the two aspects of every financial transaction. Every debit transaction must have a corresponding credit transaction(s) and vice versa.

Golden rules of accounting

There are three types of accounts.

1.Personal account
2.Real account
3.Nominal account

Let us know debit and credit rules of these accounts.

1.Personal account:-
Debit - The Receiver
Credit - The Giver

2.Real account:-
Debit - What comes in 
Credit - What goes out

3.Nominal account:-
Debit - All expenses and losses
Credit - All incomes and gains