Give the rules of debit and credit of the three types of accounts.

Q: Give the rules of debit and credit of the three types of accounts.

1. Personal Accounts: Accounts which relate to persons, i.e., individuals, firies, companies, debtors or creditors, etc., are Personal Accounts. Examples of Personal Accounts are the account of Ram & Co., a customer (Debtor), or the account of Jhaveri & Co., a supplier of goods (Creditor), Capital Account and Drawings Account of the proprietor. The main purpose of preparing a Personal Account is to determine the balance due to or due from persons or organisations. Rule of Debit and Credit - Debit the receiver, Credit the giver. 2. Real Accounts: Real Accounts are the accounts which relate to tangible or intangible assets of the firm (excluding debtors). Examples of tangible assets are: land, building, investments, plant and machinery, stock or cash in hand. Examples of intangible assets are: goodwill, patents and trademarks. Rule of Debit and Credit-Debit what comes in, Credit what goes out. 3. Nominal (Revenue or Expense) Accounts: Accounts which relate to expenses, losses, gains, revenue, etc., are termed as Nominal Accounts. These are Salary Account, Purchases Account, Interest Paid Account, Sales Account and Commission Received Account. The net result of all the Nominal Accounts is profit or loss which is transferred to the Capital Account. Rule of Debit and Credit-Debit all expenses and losses, Credit all incomes and gains.

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Personal Accounts: Accounts which relate to persons, i.e., individuals, firies, companies, debtors or creditors, etc., are Personal Accounts. Examples of Personal Accounts are the account of Ram & Co., a customer (Debtor), or the account of Jhaveri & Co., a supplier of goods (Creditor), Capital Account and Drawings Account of the proprietor. The main purpose of preparing a Personal Account is to determine the balance due to or due from persons or organisations.

Rule of Debit and Credit - Debit the receiver, Credit the giver.

Real Accounts: Real Accounts are the accounts which relate to tangible or intangible assets of the firm (excluding debtors). Examples of tangible assets are: land, building, investments, plant and machinery, stock or cash in hand. Examples of intangible assets are: goodwill, patents and trademarks.

Rule of Debit and Credit-Debit what comes in, Credit what goes out.

Nominal (Revenue or Expense) Accounts: Accounts which relate to expenses, losses, gains, revenue, etc., are termed as Nominal Accounts. These are Salary Account, Purchases Account, Interest Paid Account, Sales Account and Commission Received Account. The net result of all the Nominal Accounts is profit or loss which is transferred to the Capital Account.

Rule of Debit and Credit-Debit all expenses and losses, Credit all incomes and gains.

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