Golden rules of Debit credit – second rules

golden rule

golden rule

In simple word, Debit means the amount reduce from your account and Credit means the amounts credited in your account. For example- when A Person gives loan to another person,the loan given is  an asset to the giver because it generate income for  him. So it has to be debited and  cash account has to be credited. When  He gives loan than cash balance should be deducted. This is the concept of double entry in accounting.


All those assests which are taken by an organization are debited.

All those assests which are sold by an organization are credited.

For example- Goods purchased for RS 2000

Goods sold for RS2000

Explanation-   Here purchases account is nominal account. It has to be debited and   Cash is real account, It has to be credited.

By the way  Cash account is real account,  It  has to be debited .and Sales account is nominal account ,it has to be credited.


Lets discuss about  second  rules of debit and credit.   In previous post , we are familiar with second rules of debit and credit.  See the  examples for  it  –

Started business  with  capital  Rs 100000

Explain- Two accounts include in it such as cash and capital. Cash is assest  account but capital is personal account. Cash will be increased and capital will be increased.

2.Purchased goods from Mohan Rs 111

Explain- Two accounts involve in it such as purchases and mohan. Purchases account is nominal account(expenses) and Mohan is personal account(liabilities).Mohan’s A/c  will be increased and Purchases A/C will be increased.

3. Sold goods to Mohan Rs100

Explain-Two accounts involve in it such as Mohan and sales. Mohan’s A/C IS personal account and  Sales is nominal account. Mohan is debtor(assests) but In this sentence sales will  not be treated as nominal account but these are assests. Mohan’s A/C will be increased  than  sales will be decreased.

4. Withdraw cash from bank for personal use

Explain- Two accounts present in it such as Drawings A/C and Cash A/C. Drawings A/c is personal A/C  and cash is real account (assests )  . Drawings account will be decreased and cash will be decreased.

5.Withdraw cash  from bank for office use

Explain-Two accounts are involved in it such as cash and bank. Cash wii be increased than Bank will be decreased.

6.Salaries received

Two account are involved in it such as cash and salary. Cash will be increased but salaries will be increased.

7. Deposited in to bank rs199

Explain-  Bank and cash are involved in it. Bank will be increased than cash will be decreased.

8 Returned goods to Mohan Rs1000

Explain- Two accounts are involved in it . Mohan will be decreased than purchases return will be decreased.

9. Goods  returned by Mohan rs100.

Explain- Two accounts are involved in it such as Sales return and Mohan. Sales return will be decreased than Mohan ‘s A/c will be decreased.

10. Commission received

Explain-  Two accounts include in it such as cash and commission . Cash will be increased than commission will be increased.

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