Most of the big industrial organisations follow this process of double entry in terms of bookkeeping. However, certain rules and regulations are to be followed in this case.
Types of accounts and rules:
- In case of Personal Accounts, Receiver has to be Debited and Giver has to be Credited.
- In case of Real or Property Accounts, Debit is that which comes in and Credit is that which goes out.
- In case of Nominal Accounts, all Expenses and Losses are Debited and all Incomes and Gains are Credited.
By following these rules a proper accounting book can be set.
Links of Previous Main Topic:-
- Preparation of final accounts
- Recording of business transaction basis of accounting
- Single entry system of bookkeeping
- Double entry system of bookkeeping
- Classification of accounts
Links of Next Financial Accounting Topics:-