Accounting for Managers

May 29th, 2015
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Murray State University
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Rules of Accounting: The three types of accounting rules are there to maintained for transactions are: 1. Personal Accounts 2. Real Accounts 3. Nominal Accounts

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Accounting for Managers(1st Semester, MBA)Rules of Accounting:The three types of accounting rules are there to maintained for transactions are:1. Personal Accounts2. Real Accounts3. Nominal AccountsPersonal AccountsPersonal accounts are the accounts of persons with whom the business is required to deal with. These include accounts of natural and artificial persons such as : Krishnas A/c, Tata co. A/c, Canara Bank A/c, Sundry debtors A/c etc. the rule of personal account is:-Debit the ReceiverCredit the GiverFor example: Mr. Krishna received money from Canara Bank. Here the money receiver is Mr. Krishna so, Mr.Krishna is debited. And the money giver is Canara Bank so, Canara Bank is credited.Here Krishna receiver and Canara Bank is giver.Krishnas A/c - DrCanara Bank A/c - CrReal AccountsReal accounts are maintained for assets or properties of the business. For example: Building A/c, Machinery A/c, Cash A/c, Furniture A/c, Goodwill, Patent etc. the rules of real account is:-Debit What comes inCredit What goes outFor example: Building purchased by cash. Here Building comes in to the business so, Building is debited. And Cash goes out or cash given for the purchase of Building so, Cash is credited.Here Building comes in and Cash goes out therefore:Building A/c - Dr Cash A/c - CrNominal AccountsNominal accounts are accounts where incomes and expenses are recorded. For example: Salaries A/c,

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