Golden Rules in Accountancy

1. RAMAKRISHNA MISSION SIKSHANAMANDIRA
PIYUSH PIKU SINHA
B.Ed 1ST YEAR 2ND SEMESTER
ROLL NO: F - 02
SESSION : 2018-20
GOLDEN RULES OF ACCOUNTING

2. What is a transaction?
• When money is exchanged, and/or
• When money’s worth is exchanged

3. Sides of a
Transaction
Giver Receiver

4. System of Accounting
• Follows Double Entry System
• Makes a record for both Giver and Receiver
• One side is recorded as Debit and the other
side is recorded as Credit

5. Classification
of Accounts
Real
Account
(Assets)
Personal
Account
(Ram/Shyam)
Nominal
Account
(Expenses,
Loss, Income,
Gain

6. Golden Rules of Debit and Credit
Real Account
• What comes in (Debit)
• What goes out (Credit)
Example:
Plant and Machinery, Building, Furniture, etc.
When we buy furniture for Rs. 1000
• Furniture as an Asset comes in, and
• Cash goes out
Furniture A/c ……………….. (Debit) 1000
To Cash A/c (Credit) 1000

7. Personal Account
• Receiver (Debit)
• Giver (Credit)
Example:
Ram, Shyam, A Ltd, etc.
Paid Rs. 1000 to Ram
• Ram is receiving cash, and
• Cash is going out
Ram A/c ……………. (Debit) 1000
To cash A/c ………….(Credit) 1000

8. Nominal Account
• Expenses and Losses (Debit)
• Income and Gain (Credit)
Example:
Rent paid of Rs. 1000
• Expense occurs as rent
• Payment is made in cash
Rent A/c …………….. (Debit) 1000
To Cash A/c…………. (Credit) 1000

9. Thank You