Journal entries without golden principles

Basically Golden Rules are the Soul of Accountancy! by the passage of time we master the art,

but it can not be said that we do not apply the Rules, unknowingly we use them!

I have been working in corporate for last 12 years. Never a single day i applied Golden rules of accountancy. Can any member enlighten who invented "Golden rules of accountancy"? It was not by luca pacioli. Luca pacioli takes credit for double entry system and not Golden rules.

Hi Bhavani,

For the purpose of Journal entry - we must totally go by double entry system. Under double entry system, journal entry is recorded based on exchange of value in the transaction. In the case of sales - Exchange involves money and goods. Hence money is debited which is the receiving part and sales (goods/services going out) is credited which is giving part. The understanding of double entry system is sufficient to pass any journal entry i.,e to record exchange of value in the transaction. 

Coming to Golden rules - No where available in google who created Golden rules. However Golden rules was followed in Europe and Americans have their own approach called 'American approach' . Both these approaches are discussed in B.S Raman book Fundamentals of accounting. It is much easier to go by American approach than European approach i,e., Golden rules. 

I would rather call it Golden formulae than rules as one must try to understand the logic behind framing the golden rules. Else students will get wrong understanding of accounts.

Hi Bhavani,

For the purpose of Journal entry - we must totally go by double entry system. Under double entry system, journal entry is recorded based on exchange of value in the transaction. In the case of sales - Exchange involves money and goods. Hence money is debited which is the receiving part and sales (goods/services going out) is credited which is giving part. The understanding of double entry system is sufficient to pass any journal entry i.,e to record exchange of value in the transaction. 

Coming to Golden rules - No where available in google who created Golden rules. However Golden rules was followed in Europe and Americans have their own approach called 'American approach' . Both these approaches are discussed in B.S Raman book Fundamentals of accounting. It is much easier to go by American approach than European approach i,e., Golden rules. 

I would rather call it Golden formulae than rules as one must try to understand the logic behind framing the golden rules. Else students will get wrong understanding of accounts.

Under American approach the accounts are classified into five:

1) Asset - Debit

2) Expenditure - Debit

3) Liability - Credit

4) Income - Credit

5) Equity - Credit

This is a much better approach than Golden principles as logic behind understanding Golden principles is comprehensive .