Personal Accounts and Golden Rules of Accounting
Personal accounts are required to monitor individual transactions and keep precise records of business transactions with specific parties. They are frequently used in combination with general ledger accounts to simplify recording as well as analyzing financial transactions. The golden rule of accounting is applicable to personal accounts as well.
DEBIT the receiver; CREDIT the giver.
Suppose, a natural or artificial entity makes a donation to a business, it is an cash inflow for the business. Here, the receiver account (natural or artificial entity) must be debited while the business receiving the donation must be credited in the journal entry. Suppose, goods sold to Ramesh is a financial transaction. Here, Ramesh (a natural personal account) is debited and the business who gives the goods to Ramesh have to be credited.