Nominal Account
Rule – “Debit all the Expenses and Losses, Credit all the Incomes and Gains”
All the expenses and losses as well as all the incomes and gains come under Nominal Account. Expenses include Salaries Paid, Rent Paid, Discount Allowed, etc. and Incomes include Commission Received, Interest Received, Discount Received, etc.
It implies that all the expenses and losses incurred in business are debited and all the income and gains should be credited.
3 Golden Rules of Accounting – Types, Examples & more
Accounting is the process of measuring and recording all the financial transactions that happen in a financial year. It includes summarizing, analyzing, and recording the data. It helps in getting a clear picture of the financial position of the business by seeing the value of a company’s assets and liabilities.
Identifying and systematically recording accounting transactions in the appropriate books of accounts is known as bookkeeping. The Golden Rules of Accounting serve as the basis for recording all business transactions.
In this article, we will discuss the three Golden Rules of Accounting along with their types and examples.