TamilDada
    Facebook Twitter Instagram
    Facebook Twitter Instagram
    TamilDada
    Wednesday, July 6
    • Home
    • Business
      • Life Insurance
      • Insurance
      • Digital Marketing
    • Entertainment
    • Health
      • Fitness
    • World
      • Education
      • Foods
      • Travel
      • Law
      • News
    • Sports
    • Life Style
      • Home Improvement
      • Fashion
      • Kitchen
    • Technology
      • Apk
      • App
      • Gadget
      • Software
      • Website
      • SEO
      • Games
    TamilDada
    You are at:Home»Business»Golden Rules of Accounting

    Golden Rules of Accounting

    DaDaBy DaDaMay 19, 20211 Comment3 Mins Read
    Share
    Facebook Twitter LinkedIn Pinterest Email

    To pass Journal entries systematically, we require certain rules, which are called the Golden Rules of Accounting. Golden Rules of Accounting denotes the required rules that record the day-to-day financial transactions. To understand the Golden Rules of Accounting better, we must have an understanding of types of Accounting. Broadly, there are three major classifications of accounts, i.e. Personal Account, Real Account, and Nominal Account.

    Let’s understand the Golden Rules of Accounting with examples:

    1. Personal Account: Accounts belonging to persons, Trade Receivables, Trade Payables, etc., are termed personal accounts. Here persons refer to Real persons and Artificial Judicial persons such as companies, Govt. organizations, etc. There are 3 types of Personal Account: Natural Personal Account, Artificial Personal Account, and Representative Personal Account.

    Golden Rule: Debit the Receiver, Credit the Giver.

    For example, The cash amount received from Mohan is Rs. 5000. Here, you will debit the cash account (receiver), and you will credit Mohan’s account (giver).

    2. Real Account: Accounts related to a firm’s assets, properties, and possessions. For example, Machinery Account, Cash in Hand, Investments, Fixed Deposits, etc.

    Golden Rule: Debit what comes in, Credit what goes out.

    For example, Business commenced with capital Rs. 2,00,000. Here, the cash account will be debited (what comes in), and the capital account will be credited ( what goes out ).

    3. Nominal Account: Accounts belonging to expenses, losses, incomes, and gains. For example, Accounts for salary, rent, interest paid, commission receives, etc.

    Golden Rule: Debit all expenses and losses, Credit all incomes and gains.

    For example, The Dividend received is Rs. 3,00,000. Here, you will debit the Bank account (receiver), and the business will credit the Dividend account (income).

    As we have understood the Golden rules of Accounting with examples, let us understand what is debit note and credit note.

    What is Debit Note and Credit Note?

    A Debit Note and Credit note is used while the return of goods is made between the two businesses.

    Debit Note: In case of return of goods, it is the basis of recording an entry in Purchases Return Book or Purchases Journal Book. It is an intimation for debit made in the account of the supplier containing the reason for it. The customer prepares a debit Note on the supplier. Students can specialize in any subjects like accounting course, auditing, and finance.

    An invoice is a kind of Debit Note.

    Situations where a Debit Note is issued to the seller are as follows:

    1. Invoice value correction.
    2. Warranty claims.
    3. Purchase cancellation by buyer.
    4. Incentive received by a buyer from the seller.
    5. Goods returned due to damage or not according to buyer’s specifications.
    6. Correction of discounts, if not applied.
    7. Discount received on early payments.

    Credit Note: In case of return of goods, it is the basis of recording an entry in Sales Return Book and Sales Return Journal Book. It is an intimation of credit made in the account of the customer containing the reason for it. The supplier prepares a Credit Note.

    Situations when the seller issues a credit note:

    1. Invoice value correction
    2. Incentive given by Seller to Buyer.
    3. If goods returned due to damage or not according to the buyer specifications.
    4. Warranty claims.
    5. Purchase cancellation by buyer.
    6. Correction of discounts, if not applied.
    7. Discount given by seller on early payments.

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
    Previous ArticleImpact of Online Education on Students
    Next Article 4 Nursing Career Opportunities to Consider
    DaDa

    My Hobby is Blog Posting

    Related Posts

    Tips for a Successful Digital Marketing Campaign

    July 1, 2022

    Digital Nomad life style in 2022 and projection for 2023

    July 1, 2022

    Seven selection tips suitable for the real estate agent

    June 30, 2022

    1 Comment

    1. Pingback: Let Someone Else Handle Your Business Accounting. Tamildada

    Leave A Reply Cancel Reply

    You must be logged in to post a comment.

    LATEST POST

    Cheap Flights: 10 Tips to Book Cheap Flights

    July 5, 2022

    SHOULD I USE A LASER TO REMOVAL MY HAIR?

    July 5, 2022

    HD Lace Wigs: The Best Quality Wigs You Can Get

    July 5, 2022

    Concrete Driveways vs. Asphalt Driveways: Which is Best for Your Home?

    July 4, 2022

    5 Importance of Cosmetic Dentistry

    July 4, 2022
    Categories
    • Apk
    • App
    • Automobile
    • Automotive
    • Business
    • Digital Marketing
    • Education
    • Entertainment
    • Fashion
    • Fitness
    • Food
    • Gadget
    • Health
    • Home Improvement
    • Insurance
    • Kitchen
    • Law
    • Life Insurance
    • Life Style
    • News
    • SEO
    • Social Media
    • Software
    • Special Collections
    • Sports
    • Travel
    • Website
    • World
    • Foods
    • Games
    • Year Collection
    About Us
    About Us

    Tamildada is provide World Biggest News Web Portal 2021. Business Travel Life Style App Automobile Digital Marketing Education Entertainment Fitness Food Gadget Health Games SEO Technology News Here

    Contact Us: [email protected]

    Facebook Twitter Instagram LinkedIn VKontakte
    Popular Posts

    New York path Runners: 60 numerous years of Helping the Community & Inspiring relationships Through Running

    July 6, 2022

    Cheap Flights: 10 Tips to Book Cheap Flights

    July 5, 2022

    SHOULD I USE A LASER TO REMOVAL MY HAIR?

    July 5, 2022
    POPULAR CATEGORIES
    • Technology
    • Business
    • Life Style
    • Fashion
    • Digital Marketing
    • Entertainment
    © Copyright 2021, All Rights Reserved
    • Home
    • DMCA
    • Privacy Policy
    • Contact Us

    Type above and press Enter to search. Press Esc to cancel.

    Cleantalk Pixel