The rules of debit and credit in accounting are based on the double-entry accounting system, which is used to ensure that all financial transactions are recorded accurately and completely. The rules are:

  1. Every transaction has two equal and opposite effects on the financial statements.
  2. Every debit entry must have a corresponding credit entry and vice versa.
  3. Debit means the left side and credit means the right side.
  4. Debits always increase asset and expense accounts, while credit entries always increase liability, equity, and income accounts.
  5. The total of all debits must always equal the total of all credits in a well-designed accounting system.
  6. Personal Accounts: Debit the Receiver, Credit the Giver
  7. Real Accounts: Debit What Comes In, Credit What Goes Out
  8. Nominal Accounts: Debit all expenses and losses, Credit all incomes and gains

By following these rules of debit and credit, accountants and financial professionals can ensure that their financial statements are accurate and reliable and that their accounting systems are in compliance with generally accepted accounting principles (GAAP).