This is the bascial principle ofAccounts. Accounts are classified in to 3 catergories Namely 1. Personal A/c- Debit the receiver and credit the giver. Eg:Bank A/c. 2.Real Account- debit what comes in and credit what goes out. Eg. cash. 3.Nominal Account - Debit all expenses & losses. credit all income & gains. Eg. salary, commission received.
there are 3 golden rules in accounting. personal a/c: dr. the receiver and cr. the giver. real a/c: dr. what comes in and cr. what goes out. nominal a/c: dr. all expenses and losses and cr. all incomes and gains.