Three types of Accounts. Personal Account Account which shows dealing of business with a person is known as personal account A person can be Natural Person.

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Presentation transcript:

Three types of Accounts

Personal Account Account which shows dealing of business with a person is known as personal account A person can be Natural Person like name of debtors or creditors or a proprietor like Mohan’s A/c Kapil’s Capital A/C etc. OR It can be an Artificial or Legal person like limited companies ( Hindustan Unilever Ltd.) Partnership firms ( Kumar and Sons.) Government Agencies (Greater Noida Development Authority) etc.

Real Account Account related to property or assets are known as Real Account Assets may Tangible and Intangible Tangible Assets :- are the assets which can be seen, touched, felt and measured as cash, furniture land Building, Stock of Goods etc Intangible Assets:- are those assets which can not physically seen or touched but can be expressed in monitory terms like goodwill, Patents, Copy rights, Patents etc.

Nominal Account Account related to expenses, losses Income and Gains are known as real accounts as Salaries A/C ( Salary paid to the employees), Rent A/C, Loss by Fire A/c, Interest Received A/c, Commission Received A/c etc This Account is also known as Temporary accounts because these are ultimately transferred to Profit and loss account at the end of the year to calculate the Profit of loss of the business.

Nominal Account as Personal Accounts Some times nominal account become personal account when some prefix or Suffix is added as

Nominal AccountBecome Personal Account 1 Rent AccountOutstanding Rent A/c, Prepaid Rent A/c 2 Salaries A/cOutstanding Salaries A/c, Salaries Paid in advance A/c 3 Interest A/cInterest received in advance, Accrued interest A/c 4 Commission A/cOutstanding Commission A/c etc

Find Out the nature of the following accounts Building A/C Capital A/C Kumar &sons A/C Bank A/C Drawings A/C Salary A/C Interest A/C Rent A/C

Furniture A/c Goodwill A/C Commission A/C Prepaid Insurance Premium A/C Insurance A/C Outstanding Salaries A/C

Rules for Debit (Dr.) and Credit (Cr.) / Golden Rules of Accounting (A/Cg)

Type of Account Debit (Dr.)Credit (Cr.) 1 PersonalThe ReceiverThe Giver 2 RealWhat Comes InWhat Goes Out 3 NominalAll Expenses and Losses All profit and Gains