Golden rules of accounts (types of accounts a/c)

Personal account

Real accounts
(

Individual (Mr.
X, Mrs. Y)
Name
Organizational
(Tata ltd, SAIL)

Nominal accounts

Asset, property)

Tangible
Building,
car, land,
machinery,
cash etc

Goodwill,
patent,
copyright,
trademark
Etc.

Expenses, losses,
income, gain

Capital a/c(Mr xs capital a/c)

a/c)
Bank A/c (SBI Bank a/c of Mr. Y)
Drawings a/c (Mr x is withdrawing money)
Representative personal a/c(prepaid rent, outstanding salary)

PERSONAL ACCOUNT
Dr(Debit)= the receiver
Cr(Credit)= the giver

REAL ACCOUNT
Dr(Debit)= what comes in
Cr(Credit)= what goes out

NOMINAL ACCOUNT
Dr(Debit)= expenses, losses
Cr(Credit)= income, gain

P= personal account; R= real account; N= nominal account:

CASH R; WAGES N; BUILDING R; MANCHESTER CLUB P; SBI P; RENT N; TRADEMARK R; DIVIDEND N; LAND R;
GOODWILL R; DISCOUNT N; FURNITURE R; SALARIES N; OUTSTANDING WAGES P; STATIONARY N; PREPAID EXP P;
SALES R/N; LOAN P; REPAIR TO MACHINERY N; STOCK R; INVESTMENT R; LOOSE TOOLS R; LOSS BY FIRE N;
DEPRECIATION N; BANK OVERDRAFT P; POSTAGE N; CARRIAGE N; BILLS RECEIVABLE R; BAD DEBT RECOVERED N,
OUTSTANDING EXPENSES P; ACCRUED INCOME P; SUNDRY CREDITORS P, SUNDRY DEBTORS P; BILLS RECEIVABLE P,
BILLS PAYABLE P; FURNITURE R; CAPITAL P, OPENING STOCK R, PURCHASE N/R, SALES N/R, RETURN INWARD OR
SALES RETURN N/R, RETURN OUTWARD OR PURCHASE RETURN N/R; INSURANCE N; BAD DEBT N ETC.
ASSET: 1. getting or will be getting benefit
2. It can be converted into cash in future
3. it must be woned by business
Dr any asset a/c Cr
Dr any liability a/c Cr

Dr

Increase
+

Increase
+

Decreas
e-

Decreas
e-

Increase
+

LIABILITY: not yet paid or will be paid

any expenses Cr
Decreas
e-

Dr any income a/c Cr

Dr

Decreas
e-

Decreas
e-

Increase
+

capital a/c

Cr

Increase
+

ASSETS= A,LIABILITIES = L, assets and liabilities can be divided into :

fixed asset=FA,current asset=CA, current liability=CL,intangible asset=IA,liquid asset=LA, fictitious assets=FIA:
LAND FA; BUILDING FA; DEBTOR CA; CLOSING STOCK CA; PLANT & MACHINERY FA; FURNITURE & FITTING FA;
BANK OVERDRAFT CL; CREDITOR CL; INVESTMENT FA/CA; PATENT IA; CASH IN HAND LA; CASH AT BANK LA;
LOAN TO Mr. A A; LOAN FROM Mr. Y L; BILLS RECEIVABLE CA; BILLS PAYABLE CL; OUTSTANDING SALARY CL;
PREPAID INSURANCE CA; CAPITAL L; PRELIMINARY EXPENSES FIA
CREDIT = C, DEBIT = D:
CAPITAL C, OPENING STOCK D, PURCHASE D, SALES C, RETURN INWARD D, RETURN OUTWARD C, WAGES
CARRIAGE INWARD D, FREIGHT D, ROYALTY ON PRODUCTION D, GAS AND FUEL D, DISCOUNT RECEIVED
DISCOUNT ALLOWED D, BAD DEBT D, RESERVE FOR BAD DEBT C, COMMISSION RECEIVED C, REPAIR D, RENT
SALARIES D, LOAN SECURED C, INTEREST RECEIVED C, INTEREST PAID D, INSURANCE D, CARRIAGE OUTWARD

D,
C,
D,
D,

ADVERTISEMENT D, SUNDRY EXPENSES D, TRADE CHARGES D, MISCELLANEOUS RECEIPT C, INCOME TAX D, OFFICE
EXPENSES D, IMPORT DUTY D, ALLOWANCE D, SALES TAX D, PROVISION FOR DISCOUNT ON DEBTORS C, PROVISION
FOR DISCOUNT ON CREDITORS D, SUNDRY CREDITORS C, SUNDRY DEBTORS D, GOODWILL D, PLANT AND
MACHINERY D, LAND AND BUILDING D, FURNITURE FIXTURE AND FITTINGS D, INVESTMENT D, CASH IN HAND D,
CASH AT BANK D, RESERVE FUND C, GENERAL RESERVE C, BILLS RECEIVABLE D, BILLS PAYABLE C, DEPRECIATION D,
ACCRUED INCOME D, OUTSTANDING EXPENSES C, PREPAID EXPENSES D, BAD DEBT RECOVERED C, PATENT AND
TRADE MARKS D ETC.

Debit should be equal to credit.