Personal Account

 

Personal Account

A personal account is a general ledger account. All accounts related to persons, whether natural persons like individuals or artificial persons like companies, fall in this category. 

In the case of a personal account, when a business receives something from another business or individual, the first business becomes the receiver, and the second business or individual from which it was received becomes the giver. 

Golden Rule 1 says, Debit the receiver, credit the giver. Applying the rule to our example, the books should reflect a debit on the personal account and a credit on the business account.

Let’s take the example of buying a gift from a gift shop. In your account, the transaction will reflect as such.

Date

Account

Debit

Credit

XXXX

Purchase Account

Rs.5000

 
 

Gift Shop

 

Rs.5000

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