Golden Rules of Accounting – Explained by Shalini Mishra

Introduction

Accounting is the language of business. But just like any language has grammar, accounting has its own set of rules—The Golden Rules of Accounting. These are the foundation for recording every transaction, and understanding them is key for every Commerce student and future businessperson.

Let’s simplify these golden rules, the way I do for my students at Shalini Classes Live.

What Are the Golden Rules of Accounting?

The Golden Rules are based on the types of accounts. In accounting, every transaction affects at least two accounts. To record them correctly, you need to understand these three types:

1. Personal Account
2. Real Account
3. Nominal Account

Let’s look at the rule for each one.

Personal Account

Rule: Debit the Receiver, Credit the GiverThis applies to individuals, firms, companies—any person or entity involved in the transaction. 

Example:

You paid ₹5,000 to Mr. A.
- Mr. A is the receiver → Debit
- Cash is going out → Credit

Real Account 

Rule: Debit What Comes In, Credit What Goes OutThis rule applies to physical and tangible assets like cash, machinery, furniture, etc.

Example:

You bought a computer for ₹30,000.
- Computer is coming in → Debit
- Cash is going out → Credit

Nominal Account

 Rule: Debit All Expenses and Losses, Credit All Incomes and GainsThis rule deals with income, expense, loss, or gain—what we call temporary accounts.

Example:

You paid ₹2,000 as electricity bill.
- Electricity is an expense → Debit
- Cash is going out → Credit

Shalini’s Tips to Remember

- Link the rule with real-life behavior: Who got? Who gave? What came in? What went out?

- Make flashcards for the three types of accounts with 2–3 examples each.
- Revise with real scenarios—like paying rent, earning interest, or buying goods.
- Practice journal entries regularly.

Conclusion

Mastering the Golden Rules of Accounting makes journal entries much easier. If you're in Class 11, 12, or just starting your Commerce journey, learning these with examples will set a strong foundation.

At Shalini Classes Live, I explain these rules in live interactive sessions with real-life examples, quizzes, and doubt sessions to ensure every student understands—not just memorizes.

Want to learn more like this? Join our classes or download the app today!