Basic Accounting
What is Accounting ?
Accounting is the systematic recording, reporting, and analysis of financial transactions of a business.
The in charge of accounting is know as an accountant and this individual is typically required to follow a set of rules and regulations such as the Generally accept accounting Principle.
Accounting allow a company to analyze the financial performance of the Business and look at statics such as net profit.
The in charge of accounting is know as an accountant and this individual is typically required to follow a set of rules and regulations such as the Generally accept accounting Principle.
Accounting allow a company to analyze the financial performance of the Business and look at statics such as net profit.
Rules of Accounting
Personal Account
Personal account relates to persons with whom a business keeps dealings. A person called be a natural person or a legal person. if a person receives any things from the business he is called receiver and his account is to debited in book of business.
The Golden Rule for Personal Account is ,
Debit(Dr.) is the Receiver
Credit(Cr.) is the Giver.
Real Account
Real Account relates to property which may either come into the business or go from business. If any property or goods come into the business account of that property or goods is to be debited in the books of the business. If any property or goods goes out from the business account of that property or goods is to be credited in the books of business.
The Golden Rule for Real Account
Debit What come in
Credit what goes out
The Golden Rule for Real Account
Debit What come in
Credit what goes out
Nominal Account
Nominal Account is an account that relates to business Expenses, Loss, Income and Gains.
If Business incurs expenses to manage and run business account of that expense is to be debited in the book of Business when a business earns in come by rendering services or hiring business assets, an account of that income is to credited in the books of business.
The Golden Rule for Nominal Account
Debit All Expenses or Loss
Credit All Income Gains or Profit