Rules for debit & credit

SYSTEM OF RECORDING 

(a) Single entry system : 

Under this system both debit and credit aspects of transaction may not be recorded. In this system only cash and personal accounts are maintained. 

It is known as Accounts from incomplete records. (b) Double entry system : 

Double entry system is the system under which both debit and credit aspects of transactions are recorded. 

It is an accounting system where every debit has a corresponding credit and vice-versa is applied. 

RULES OF DOUBLE ENTRY SYSTEM Recording transactions under 

Double Entry System, there are three types of accounts called : 

(1) Personal accounts : 

Accounts relating to persons are called personal accounts. Theses person may be customers, suppliers, money lenders, owner and banks. 

(2) Real accounts : 

Accounts relating to tangible and intangible properties and possession are known as real accounts. 

(for e.g. cash, goods, bills receivables etc are tangible properties and goodwill, copyright, patents and trademarks are intangible properties) 

80, real accounts are classified as Tangible 

Real Account and Intangible Real Account. 

(3) Nominal accounts : 

Accounts concerning the expenses and losses and incomes and gains of a business enterprise are called as nominal accounts. These accounts help in the preparation of Income Statement. 

Example of nomina| accounts are : salaries commission, rent, wages, bad debts etc.