Personal Account

Rule – “Debit the Receiver, Credit the Giver

The accounts which relate to an individual, group of individuals, firm, company, or institute are considered to be personal accounts. There are three types of personal accounts:

  • Natural Personal Account: Accounts of natural persons; i.e., accounts of particular human beings are considered in this. Example, Ram A/c, Mohan A/c, Creditors A/c, Debtors A/c, Drawings A/c etc.
  • Artificial Personal Account: These accounts do not have the physical existence of a human being but a group of human beings working together is considered to be an Artificial Personal Account. For example, Company A/c, Partnership Firm A/c, Bank A/c, Club A/c etc. 
  • Representative Personal Account: When an account represents a particular person or group of persons, then it is called a Representative Personal Account.

It implies that ‘Debit the person’s account who receives something from the business out of a transaction and Credit the person’s account who gives something to the business‘. 

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.

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