What are the three golden rules of accounting?

Introduction / Context:
The golden rules of accounting are classic memory aids used to learn double entry bookkeeping, especially when classifying personal, real and nominal accounts. They summarise how to apply debits and credits in common situations. Many commerce and finance exams include a question precisely asking for these three rules, so it is important to know their correct wording and the account types they apply to.

Given Data / Assumptions:

• The question refers to traditional golden rules based on personal, real and nominal accounts.
• One rule applies to personal accounts, one to real accounts and one to nominal accounts.
• Debits and credits must be paired logically with receipts, payments, expenses and incomes.
• The correct answer must contain all three standard statements in correct form.

Concept / Approach:
The golden rules are usually taught as follows. For personal accounts, debit the receiver and credit the giver. For real accounts, debit what comes in and credit what goes out. For nominal accounts, debit all expenses and losses and credit all incomes and gains. These rules are derived from the accounting equation and reflect how different account types behave when value is received or given. The correct option must therefore list all three statements together without reversing or mixing them incorrectly.

Step-by-Step Solution:
Step 1: Identify that the first rule should describe how to handle personal accounts, that is, accounts of persons and entities. Step 2: Recall that this rule is debit the receiver, credit the giver. Step 3: Identify that the second rule should cover real accounts, such as cash, machinery and buildings, where we debit what comes in and credit what goes out. Step 4: Identify that the third rule should cover nominal accounts, such as expenses and incomes, where we debit expenses and losses and credit incomes and gains. Step 5: Choose the option that clearly includes all three rules in this standard sequence.

Verification / Alternative check:
To verify, apply the rules to a simple transaction. If a business receives cash from the owner, the owner is the giver and cash is what comes in. According to the rules, we debit the receiver and credit the giver for personal accounts, and debit what comes in and credit what goes out for real accounts. In practice, we debit Cash and credit Capital, which matches the real rule for cash and the equity nature of capital. For an expense such as rent, the nominal rule tells us to debit the expense and credit cash or payable. These examples show that the combined set of rules in the correct option fits everyday accounting practice.

Why Other Options Are Wrong:
Option B is wrong because it mixes account types and does not follow any recognised set of rules. Option C is incorrect since it ignores many accounts and suggests that only cash accounts are debited. Option D is wrong because it treats the entire balance sheet and income statement as if they had uniform debit or credit directions, which is not true. Option E reverses the logic for real and nominal accounts, stating debit what goes out and credit what comes in and credit expenses, which directly contradicts the standard golden rules.

Common Pitfalls:
Learners sometimes memorise the phrases mechanically and then confuse which rule belongs to which account type. Another common mistake is reversing the last rule and writing debit incomes and credit expenses, which would distort the profit calculation. Some students also forget that these rules are a simplified teaching tool and that modern accounting often uses the expanded accounting equation instead. However, for examination purposes, remembering the exact wording of the traditional golden rules remains very useful.

Final Answer:
Debit the receiver, credit the giver; debit what comes in, credit what goes out; debit all expenses and losses, credit all incomes and gains.