ACCOUNTING 101: GOLDEN RULES FOR TYPES OF ACCOUNTS

Sa Mga Nag- Aaral ng Basic Accounting: Read This

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Three Golden Rules of Accounting

Tatlo (3) ang klase ng accounts:

1. Real Account

2. Personal Account

3. Nominal Account.  

Golden Rules for Types of Accounts

1. Rules of Real Account.

Ang Real Account ay account na hindi isinasara sa katapusan ng Financial year at ang mga balanse ay dinadala sa susunod na taon.  Karaniwan Ang mga Real Account ay mga account na may kaugnayan sa mga Assets.

ü Debit What comes In. (I-debit ang pumapsok)

ü Credit What Goes Out. (-credit ang lumalabas)

Explanation:

ü Kung an isang Asset is moving out (lumalabas) sa business, dapat ang asset na yun ay credited,and

ü Kung ang asset coming in (pumapasok) sa businesss, dapat debited.

Tips for Debit and Credit

Ø Debit When asset Increases. (I-debit kung nadagdag ang asset)

Ø Credit When asset Decreases.(I-credit kung nabawas ang asset)

Real Account Example 1 : Purchased Machinery from ABC for Credit - 5000, Find out the dual aspect.

Aspect 1 = Machinery Increases or coming in.

Aspect 2 = Liability Increased or Credit the Giver (refer the rule of personal account)

Journal Entry

Date	Particulars	JF	Debit	Credit
xx	Machinery   (Machinery Comes In)		5000
	ABC (Credit the Giver) (Liability Increased)
	Purchased Machinery from ABC for  Credit			5000

Real Account Example 2 :  Computer Purchased For Cash  25000

In this example, the two aspects are Computer & Cash , Both of these are assets and it is one of the best example of real account transactions.

ü Computer -What Comes in  = Debit

ü Cash – What Goes Out = Credit

Journal Entry

Date	Particulars	JF	Debit	Credit
xx	Computer (comes in)		25000
	Cash (goes out)			25000
	Purchased computer for cash

2.  Rules of Personal Account.

Ang Personal Account ay mga account na may kaugnayan sa Mga Tao, Institusyon, Kompanya, o iba pang anyo ng Institusyon.

ü Debit the receiver

ü Credit the giver

Explanation:  

ü Personal account is related to individual or artificial persons created by law like Corporations , etc.

ü Kapag ang Pera ay binayad o ibabayad sa isang tao o kumpanya, dapat i-debit ang taong o kumpanyang iyon.

ü Kapag ang Pera ay natanggap o matatanggap mula sa isang tao o kumpanya, dapat i-credit ang tao o kumpanyang iyon.

Personal Account Example 1:  Purchased goods for 10000 from Abraham Mathew

The journal entry:

² Credit The giver  - Here Giver is Abraham Mathew hence credited.

² Debit All Expense – Purchase is expense to the company

Date	Particulars	JF	Debit	Credit
	Purchases (Debit all expenses)		10000
	Abraham Matthew (Credit the Giver)			10000
	Purchased goods for 10000 from Abraham Matthew

Tip :

ü Credit  when Liability Increases  ( Here liability increases ,amount payable to Abraham Mathew)

ü Debit When Liability Decreases.

Personal Account Example 2 : Received cash from Michael Trade Links 5000 towards their pending payment.

Sa example na ito ang mga bahagi ng mga transaksyon ay Cash and Michael Trade Links.

Ø Cash ay asset, hence, related sa real account.

Ø Micheal Trade Links ay isang Customer o Mamimili na bumili ng mga kalakal mula sa company. Ang Micheal Trade Links ay isang tao o company hence related sa personal account.

ü Cash – What comes in – Debit

ü Micheal Trade Lines – The Giver – Credit

The journal entry:

Date	Particulars	JF	Debit	Credit
	Cash (comes in)		5000
	Michael Trade Links (the Giver)			5000
	Received cash from Michael Trade Links for full settlement

3.  Rules for Nominal Account

Ang mga nominal account ay report sa kita at gastos o losses o mga kita. Ito ay isang pansamantalang account at isasara sa dulo ng bawat Financial year  sa pamamagitan ng paglilipat ng total sa Profit & Loss account.

ü Debit All expense or Losses

ü Credit All Income or Gains.

Example:

Nominal Account Example 1 : Commission Paid   1000

The journal Entry

² Nominal account rule – Debit all Expense -Commission is the expense

² Real account rule – Credit what goes out – Cash (Asset) goes Out

Date	Particulars	JF	Debit	Credit
	Commission (debit all expenses)		10000
	Cash (credit what goes out)			10000
	Commission Paid

Nominal Account Example 2 : Bank Interest credited to Philippines Bank account 1200.

Dito , dalawang ang panig ng mga transaksyon ang Philippine Bank  & Bank Interest. Ang Phillipine Bank ay isang asset account na isang Real Account at ang Interest ng Bangko ay isang Income Account, hence related sa Nominal account.

ü Philippine Bank Account – What Comes In – Debit

ü Bank charges – All Incomes –Credit

The journal entry

Date	Particulars	JF	Debit	Credit
	Phillipine Bank		1200
	Bank Charges Received			1200
	Bank charges credited by Philippine Bank

Tip:

² Debit - when Expense Increases.

² Credit - when Income Increases.