Accounts are mainly classified in to three they are
  • Real Account:- Real accounts are related to asset account which can be touched felt, eg building account, machinery account ,stock,furiture etc
  • Personal Account:- Personal accounts are related to persons , institutions compnies. examples are bank account, creditors a/c etc
  • Nominal Account:- Nominal accounts are related to income and expenses or losses and gains , examples are rent, commision, salary etc

Dual Aspect

If there is a debit there has to be a corresponding credit, Let,s explain this with an example. Purchased a car for Rs 100000.00 . In This transaction first aspect is “car” by spending money business acquiring a car worth Rs 100000.00 , the second aspect is cash spending money towards value of car.
  1. Car is coming in business
  2. Cash going out from the business

Rules For Debit And Credit

  • Real Account
    Debit What Comes In
    Credit What Goes Out
Lets learn this with a Transaction,  Furniture purchased for Rs.2500.00  First of all try to understand which types of accounts are related with this transaction. Furniture & cash are the dealing in this transaction. Both furniture and cash are asset. so both aspects ( debit, credit) are related to real account. Now check what is the Rule for Real account.“Debit what comes in” , Here furniture is coming in the business, So the debit aspect is furniture.Then Real account rules for credit ” Credit what goes out” Cash is going out so credit “cash”.


Particulars Debit(Dr) Credit(Cr)
Furniture 2500.00 0.00
Cash 0.00 2500.00
  • Personnel Account
    Debit The Receiver                                                                                                                 Credit The Giver
Now We can move to the Personel account.Let’s find out the debit & credit for the transaction “Furniture purchased from Suraj Furnitures on credit For Rs 3000.00″.what are the two aspects in this transaction? 1.Furnitures   2. Suraj Furnitures .Then find out the type of accounts involved in this transaction. As furniture is an asset real account is involved & Suraj Furniture is a company or sole trader or partnership firm, it is a personel account.What are the rules for these two account type “Debit What comes in” Furniture is coming in to the business so debit is given to the furniture
now take the rules for personel account “Credit the giver” who is giving the furniture ? SO credit is given to “Suraj furnitures”.


Particulars Debit(Dr) Credit(Cr)
Furniture 3000.00 0.00
Suraj Furnitures 0.00 3000.00
  • Nominal Account
    Debit All Expenses or Losses
    Credit All Incomes or gains
Finally Nominal Account. On every month end we are getting salary let’s think it from a companies view point. Salary paid to employees Rs100000.00 the two accounting aspects are salary & cash
, then account type , salary is expense to the company, so salary comes under nominal account .as per nominal account “Debit all expenses or losses” So Debit Salary & Cash is going out of the Business,Hence Credit Cash.


Particulars Debit(Dr) Credit(Cr)
Salary 100000.00 0.00
cash 0.00 100000.00

Do it your self

Find out the debit and credit aspects of the following transactions

  1. Purchased land for Rs 105000.00
  2. Purchased Goods from S.K creation on credit Rs 200000.00
  3. Stationery purchased for Rs 1000.00
  4. Goods sold to indian cotton for Credit RS 45000.00
  5. Rent paid to building owner RS 1500.00
  6. Cash withdrawn for personel use Rs 5000.00
  7. Tea expenses incurred for staff RS 100.00
  8. Computer purchased from computer solutions Rs 30000.00
  9. Paid commision Rs 500.00
  10. Deposite cash in to SBI 15000.00
  11. cash sales Rs 25000.00
  12. Cheque Received from indian cotton Rs 25000.00
  13. Goods returned by indian cotton Rs 2500.00
  14. Cash withdrawn from SBI 10000.00
  15. Goods returned to S.K creation Rs 5000.00

So that is all from this lesson,Next lessson is about recording of transaction.