Question 1

What are the three golden rules of accounting?

Accepted Answer

The 3 golden rules of accounting are Debit the receiver and credit the giver, debit what comes in and credit what goes out, and debit expenses and losses, credit income and gains. These rules help ensure accurate and consistent financial transactions in accounting.

Question 2

What are the 3 types of accounts?

Accepted Answer

The 3 types of accounts in accounting are Real, Personal, and Nominal accounts. Real accounts are related to assets, Personal accounts include Natural, Representative, and Artificial subtypes, while Nominal accounts deal with income, expenses, gains, and losses.

Question 3

What is the double-entry rule?

Accepted Answer

The double-entry accounting rule dictates that each transaction must be recorded in at least two accounts—one as a debit and the other as a credit. For accurate financial records, the total debits and credits must always be in balance.

Question 4

What are the advantages & disadvantages of the golden rules of accounting?

Accepted Answer

The golden rules of accounting provide consistency and accuracy in financial record-keeping, helping businesses make informed decisions. However, they can be complex for beginners and require strict adherence to avoid errors in financial statements.

Question 5

Who is mandated to follow the books of accounts?

Accepted Answer

Businesses, companies, and organizations are mandated to follow the rules of accounting and maintain accurate books of accounts. This is essential for transparency, legal compliance, and to ensure the proper reporting of financial activities.