Golden Rules of Accounting with Examples

The golden rules of accounting are foundational principles for recording financial transactions: (1) Debit the receiver, credit the giver—used in personal accounts, like paying a vendor; (2) Debit what comes in, credit what goes out—applies to real accounts, such as purchasing equipment; (3) Debit all expenses and losses, credit all incomes and gains—used in nominal accounts, like recording sales revenue. These rules ensure accurate and consistent bookkeeping.