💡The golden rules of accounting also revolve around debits and credits. Take a look at the three main rules of accounting:
💡Debit the receiver and credit the giver
💡Debit what comes in and credit what goes out
💡Debit expenses and losses, credit income and gains1. Debit the receiver and credit the giver
The rule of debiting the receiver and crediting the giver comes into play with personal accounts. A personal account is a general
ledger account pertaining to individuals or organizations.
If you receive something, debit the account. If you give something, credit the account.2. Debit what comes in and credit what goes out
For real account, use the second golden rule. Real accounts are also referred to as permanent accounts. Real accounts don’t close at year-end. Instead, their balances are carried over to the next accounting period.
A real account can be an asset account, a liability account, or an equity account. Real accounts also include contra assets, liability, and equity accounts. 3. Debit expenses and losses, credit income and gains
The final golden rule of accounting deals with nominal accounts. A nominal account is an account that you close at the end of each accounting period. Nominal accounts are also called temporary accounts. Temporary or nominal accounts include revenue, expense, and gain and loss accounts.
With nominal accounts, debit the account if your business has an expense or loss. Credit the account if your business needs to record income or gain.@effoi_assognement