--%>
Assignment Help - homework help

Rule of nominal account

Why the rule of nominal account is just opposite with the rule of personal account and real account?

E

Expert

Verified

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.

   Related Questions in Financial Accounting

  • Q : Explain production budget Give a short

    Give a short introduction of the term ‘production budget’?

    		•
  • Q : Income Tax and Investment Calculator

    Introduction Your task is to produce a Java program, which can calculate income tax and investment growth based on the yearly income/salary of an individual. Below the details are descr

    		•
  • Q : Guidelines for effective communication

    Define and explain the four guidelines for effective communication in families. Give examples to describe each guideline.

    		•
  • Q : Prepare journal entry to record

    On December 31, 20x1, the Juniper Company purchase a group of four assets for a total cost of $850,000. An independent appraiser assesses the fair value of each asset as follows: Asset Fair Value Land $100,000 Building 600,000 Equipment 250

    		•
  • Q : Calculate the Present Value PV Given

    Given that the appropriate discount rate is 10% and that the first of these dividend payments will occur 1 year from now, find the present value of the dividend stream; that is, calculate the PV of D1, D2, and D

    		•
  • Q : Investment approach of Lynch Investment

    Investment approach of Lynch: Peter Lynch, the best known mutual fund manager, also adopts the words of Benjamin Graham in the sense that he looks at companies not from the perspective of how the stock prices move

    		•
  • Q : Pricing spill-over effect Discuss

    Discuss pricing spill-over effect.

    		•
  • Q : Double taxation Specify some of the

    Specify some of the methods taxing authorities utilize to remove or diminish evil of double taxation?

    		•
  • Q : Factors for surge in the international

    List some factors which are responsible for recent surge in the international portfolio investment (IPI)?

    		•
  • Q : Define the term Accounts Payable

    Accounts Payable: It is an accounting entry which symbolizes an entity's obligation to pay off a short-term debt to its creditors. Accounts payable entry is found on balance sheet beneath the heading current liabilities. Accounts payable are frequentl

    		•