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Co-Founder & CEO movingo
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Author
Iakov Kukushkin
Copywriter, Journalist
Aug 15, 2025
Accounting is essential for businesses in the UAE. It's also a legal requirement. Accounting helps you keep track of all your finances. To do so correctly, accountants follow three golden rules. These rules apply to businesses of all sizes, from small stores to large companies.
Let's check out these rules and see some real-world examples of how they can work for you.
Let's check out these rules and see some real-world examples of how they can work for you.
Types of accounts
In accounting, all transactions fall under one of three main account types:
3 golden rules of accounting
The accounting golden rules are like the golden rule in life - they give you basic guidelines for keeping your financial records accurate and reliable. It's like treating others how you want to be treated - you treat your money well, and it'll treat you well too.
Why they are matter? Benefits of the golden rules of accounting
Following these rules will help you:
- Avoid mistakes — Transactions are recorded correctly.
- Stay organized — Easy to track income, expenses, and assets.
- Make better decisions — Financial data is accurate.
- Be audit-ready — Records are clear for legal or tax purposes.
Being prepared for audits and following business regulations in the UAE is crucial to operating legally and avoiding hefty fines. We can help with that and get your accounting in order according to international standards. Whether you're a freelancer, small business owner, or corporate executive, we've got you covered.
Fundamentals of the golden rules of accounting
The golden rules are based on the double-entry system:
- Every transaction has two sides: one account is debited, and another is credited.
- Debit means value is received.
- Credit means value is given.
- The total debit amount must always equal the total credit amount.
In short: Every time money moves, record both sides.
These rules are the foundation of proper accounting worldwide. Now let's go over the golden rules for each of the account categories.
Examples of the golden rules of accounting
Personal account
Example
Your company pays rent of AED 500 to Mr. Ahmed.
- Mr. Ahmed receives money → Debit Mr. Ahmed’s account.
- Your company gives money → Credit Cash account.
Real account
Real account is a record of all the transactions a company has done, including its debts and assets. Assets can be divided into two categories: tangible and intangible.
Example
Your company buys furniture for AED 1,000 in cash.
- Furniture comes in → Debit Furniture account.
- Cash goes out → Credit Cash account.
Nominal account
A nominal account is simply a general journal that records a business's temporary transactions for a specific period. It includes expenses, income, profits, and losses from one fiscal year, and it resets and starts over again when the next year starts.
Examples of nominal accounts include commission received, salary account, rent account, and interest account.
Examples of nominal accounts include commission received, salary account, rent account, and interest account.
Example
You receive commission income of AED 300.
- Income → Credit Commission account.
- Cash comes in → Debit Cash account.
It's not as hard as it seems at first, right? If you have any questions, write to us. We will explain each case in detail and provide personalized recommendations for you.
We also offer high-quality accounting services in the UAE at an affordable price. Our packages are tailored for small- to medium-sized businesses and anyone who needs them. If you value your time and would like to entrust your accounting to professionals, contact us using the link below. We will find the best solution for you.
Golden rules of accounting FAQ
Technically, there are three golden rules, but when you break them down into debits and credits for each account type, there are six. We've covered it in these sections.
They make sure every transaction is recorded properly and the balance is kept in the double-entry system, so your books are accurate.
First, identify the type of account: personal, real, or nominal. Then, apply the matching rule.
Debit all expenses and losses, credit all incomes and gains.
1. Every transaction affects at least two accounts.
2. Total debits must equal total credits.
2. Total debits must equal total credits.
Each time you do a transaction, you need to figure out which accounts are involved, use the golden rules and make sure the numbers add up.
The rules originate from the double-entry bookkeeping system developed by the 15th-century Italian mathematician Luca Pacioli.
Debit the receiver, credit the giver.
Software such as QuickBooks, Tally, and ZohoBooks automatically applies these rules in the background.
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