Rule of nominal account
Why the rule of nominal account is just opposite with the rule of personal account and real account?
Expert
The cause why rule of nominal account is just opposite with the rule of personal account and real account is that the Nominal Accounts cannot be viewed & touched. Therefore it has a distinct application in accounting logic.
Here I wish to expose the Accounting Rule & elucidate all the 3 accounting rules so that you might understand the accounting logic and learn them and even teach to others. When a person knows such rules then they can be very simply an accounting person (That is not an Accountant). Chartered Accountants and Cost and Management Accountants are a step forward profession however is of Very high Standing with in vast knowledge in the application of Accounting rules and logic in consistence with customary Company Laws & Accounting Standards.
A) Personal Account:
• Debit the Receiver from the company • Credit Giver to company
B) Real Account:
• Debit what comes-in to company • Credit that goes-out from company
C) Nominal Account:
• Debit each and every expenses & loses to company • Credit all incomes or revenues & profits to company
If you view the third Nominal Account all rules talk regarding what happens to the company's BUSINESS - whereas the rest of the rules Personal and Real has what coming-in & going out and who provides & receives to and from the company.
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I have worked the problem. I need to know if it is correct. If not, what I'm missing.
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