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What are accounting Principles?
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Answer Posted / rohit chauhan
he rules and guidelines that companies must follow when
reporting financial data. The common set of accounting
principles is the generally accepted accounting principles
(GAAP). account are classified according to thier
nature,based on which debiting and crediting principles
apply to them.
ther are three types of principle of accounts.
1 personal accounts.
2 real accounts.
3 nominal accounts.
[1](PERSONAL ACCOUNTS)
PERSONAL ACCOUNTS ARE OPENED IN NAMES OF INDIVIUAL
PERSONS,FIRMS,COMPANIES OR ORGANIZATION.
EXAMPLE:M.N SAPRE,BANK OF MAHARASHTRA,
rules for debiting or crediting:
Personal a/c
Debit the receiver.
Credit the giver.
[2]REAL ACCOUNTS)IN SOME ACCOUNTS,BALANCRS OUTSTANDING ARE
NOT CLOSED FROM YEARS TO YEAR,AND ARE CARRIED FOEWARD TO
NEXT ACCOUNTING YEARS.
EXAMPLE:BUILDING A/C,FURNITURE A/C, CASH A/C,
rule:Real a/c
debit what comes in.
credit what goes out.
[3]:NOMINAL ACCOUNTS:accounts related ti expenses and gains
in the firm are known as nominal accounts.
rule:debit the expenses.
credit the gains.
following are examples of nominal accounts.
sales accounts, purchases accounts,salaries accounts,
telephone accounts.
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