Accounting Concepts

Golden rules of accounting

1 min read Updated 03 Oct 2026 4 views

AI summary

The traditional personal, real and nominal account rules used in India.

2 sections

Type	What it covers	Rule
Personal	People, firms, companies, banks, and representative accounts like outstanding salary	Debit the receiver, credit the giver
Real	Things you own: cash, stock, furniture, machinery, land	Debit what comes in, credit what goes out
Nominal	Expenses, losses, incomes, gains	Debit all expenses and losses, credit all incomes and gains

Bought furniture from Sharma Traders for ₹30,000 on credit:

Furniture A/c (real — comes in)            Dr  30,000
    To Sharma Traders (personal — giver)          30,000

Paid salary ₹25,000 in cash:

Salary A/c (nominal — expense)             Dr  25,000
    To Cash A/c (real — goes out)                 25,000

The golden rules and the modern debit/credit rules always give the same entry. Use whichever you find easier.

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