Golden Rules

Types of Accounts:
1. Personal Accounting
2.Impersonal Accounting
A. Real Account
B.Nominal Account
1. Pesonal Accounting:
Debit the Receiver
Credit the Giver
Eg: Credit Purchase & Credit Sales
I. Credit Purchase:
A. Purchase goods from Mr. A
Purchase a/c Dr
To Mr A a/c., Cash., Bank

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 Golden Rules

B. Cash Paid to Mr. A

Mr. A a/c Dr
To Cash a/c
Note: Mr. A is a receiver., he is a supplier
and then sundry creditor
II. Credit Sales
A. Sold goods to Mr. B
Mr. B a/c Dr
To Sales a/c., Cash., Bank
B. Received cash from Mr. B
Cash a/c Dr
To Mr. B a/c

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 Golden Rules

Note: Mr. B is a Giver., he is a Customer and

then sundry Debtor

II. A. Real a/c:

What comes in Debit
What Goes out Credit
A. Asset Purchase:
* Bought Office Furniture
Furniture a/c Dr
To Cash a/c
* Sold office Furniture
Cash a/c Dr

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 Golden Rules

To Sales a/c

II. B. Nominal a/c:

Debit all Expenses and Losses
Credit all Incomes and Gains
Paid to Advertisement/ salary/rent (Exps)
Exps a/c Dr
To Cash A/c
Advertisement a/c Dr
To Cash a/c
Received cash
commission/Discount/Interest/Dividend
(Income& gain)

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 Golden Rules

Cash a/c Dr
To Income a/c
Cash a/c Dr
To Commission a/c

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