0Accountancy is the subject which teaches us the mechanism of accounting plinth of which stands on 3 golden rules: (i) debit what comes in, credit what goes out; (ii) debit the receiver, credit the giver; and (iii) debit all expenses & losses, credit all incomes and gains. Three most important points are required to be kept in mind: (1) while accounnting, treat yourself is the owner, (2) all events measurable only in monetary terms against legally enforceable consideration are transactions requiring record in books of accounts, (3) the events without any money value and consideration has no role in Accountancy. Say, X teaches Y free. This is an event, not a transaction having no monetary value and does not get any berth in Accountancy. But when Y pays the fees to X, it becomes a transaction in monetary value and therefore, both X & Y will have to record this transaction. It is, therefore, proverbed that all transactions are events, but all events are not transactions. This subject tells us what are (a) capital expenditure and revenue expenditure, (b) block capital and unblock capital, (c) liabilities and assets, (d) income and profit, (e) deficit and loss, (e)personal and impersonal accounts, (f) cash and non-cash transaction, and so on. All these issues emerge from any one or more of the golden rules mentioned hereinabove. The essence of these 3 golden rules is that there should be at least two heads of accounts in debt and credit. All debits shall have corresponding credit, i.e. all transactions shall have ideally at least 2 legs of heads of accounts, one debit and another credit. Therefore, without knowing all those basics, sense of accounting never becomes sound. So, know Accountancy first, and then go for accounting.
