Rules of Accounting

There are two types and sub-types of Accounting Rules and it is listed as under -

1. Personal

2. Impersonal -

a) Real

b) Nominal 

Rules are as follows -

  • Personal - Debit the Receiver, Credit the Giver (Sole Prop., Co.)
  • Real - Debit what comes in, Credit what goes out (Cash, Bank)
  • Nominal - Debit Expenses and Losses, Credit Revenue and Income (Sales)
Application of Accounting Rule


Accounting Rule of Thumb


Combination of Rules


One simple example is given below -


Both Debit and Credit cannot be Personal Accounts. Another example -


Similarly, both Debit and Credit cannot be Nominal Accounts.

Accounting Transactions can be recorded and the recording of an accounting event is known as Journal Entry. It is made in Primary and Secondary Books in Manual Accounting System.

  • Primary Books - General Ledger and Cash Book
  • Secondary Books - Registers of Purchase, Sales, Fixed Asset, Returns..etc.
In Oracle ERP System, General Ledger is called Main Ledger, and the transactions emanating from modules are referred to as Sub-Ledger.

Some points to be remembered -


That's all...........

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