3 Golden Rules of Accounting Every Student Should Know
Start Every Journal Entry with the Basics
Journal Entries become much easier when you first identify the type of account involved in a transaction. Once the account type is clear, applying the correct Debit and Credit rule becomes simple.
Understanding Personal, Real and Nominal Accounts can help you solve many basic Journal Entries quickly and accurately.
💡 Exam Tip: Identify the Account Type first, then apply the Golden Rule. This simple approach can reduce mistakes in Journal Entries.
3 Types of Accounts & Their Golden Rules
1. Personal Account 👤
Personal Accounts are related to individuals, companies, banks, firms and other organisations.
Example: ₹5,000 is paid to Rohan. Since Rohan receives the money, Rohan A/c is Debited.
2. Real Account 🏢
Real Accounts are related to business assets and properties such as Cash, Furniture, Machinery, Building and other assets.
Example: Furniture worth ₹10,000 is purchased for cash. Furniture comes into the business, so Furniture A/c is Debited and Cash goes out, so Cash A/c is Credited.
3. Nominal Account 💰
Nominal Accounts include business expenses, losses, incomes and gains. Common examples are Rent, Salary, Interest and Commission.
Example: ₹2,000 Rent is paid. Rent is an expense, therefore Rent A/c is Debited.
⚡ Quick Revision Table
| Account Type | Debit | Credit |
|---|---|---|
| Personal | Receiver | Giver |
| Real | What Comes In | What Goes Out |
| Nominal | Expenses & Losses | Incomes & Gains |
🎯 Easy Way to Remember
Personal → Receiver / Giver
Real → Comes In / Goes Out
Nominal → Expenses / Losses & Incomes / Gains
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