Learning Goal: I’m working on a accounting practice test / quiz and need guidance to help me learn.
Debit and Credit are the two accounting tools. Business transactions are to be recorded and hence, two accounts, which are debit and credit, get facilitated. These are the events that carry a monetary impact on the financial system. While keeping an account of this transaction, these accounting tools, debit, and credit, come into play. Whenever accounting transactions take place, it majorly affects these two accounts.
The Golden Rules:
The golden rules of accounting or the guidelines of bookkeeping oversee the standard of credit and debit. Before we analyse further, we should know the three renowned brilliant principles of bookkeeping:
Firstly: Debit what comes in and credit what goes out.
Secondly: Debit all expenses and credit all incomes and gains.
Thirdly: Debit the Receiver, Credit the giver.
