Question

6. State to which class of account does each of the following relate:
(a) Trade Mark
(b) Commission Received
(c) Accrued Commission
(d) Commission Received in advance.

Answer 1

Answer:

✪ Classification of Accounts under Traditional Approach or English Approach :-



1. Cash ➺ Real Account

2. Bank ➺ Real Account

3. Trade Marks ➺ Real Account

4. Debtors ➺ Personal Account (Natural)

5. Creditors ➺ Personal Account (Natural)

6. Commission Received ➺ Nominal Account

7. Accrued Commission ➺ Personal Account (Representative)

8. Commission Received in Advance ➺ Personal Account (Representative)



✪ Classification of Accounts under Modern Approach or American Approach :-



1. Cash ➺ Asset Account

2. Bank ➺ Asset Account

3. Trade Marks ➺ Asset Account

4. Debtors ➺ Asset Account

5. Creditors ➺ Liability Account

6. Commission Received ➺ Revenue Account

7. Accrued Commission ➺ Asset Account

8. Commission Received in Advance ➺ Liability Account



NOTE :



There are two approaches for classification of accounts.

One is Traditional Approach, also known as English Approach and another is Modern Approach, also known as American Approach.



❖ According to Traditional Approach or English Approach, there are three accounts :-



[i] Personal Account

[ii] Real Account

[iii] Nominal Account



❖ According to Modern Approach or American Approach, there are five accounts :-



[i] Asset Account

[ii] Liability Account

[iii] Capital Account

[iv] Revenue Account

[v] Expenses Account

Answer 2

Answer:

(a) Trade Marks ➺ Real Account

(b) Commission Received ➺ Nominal Account

(c) Accrued Commission ➺ Personal Account (Representative)

(d) Commission Received in Advance ➺ Personal Account (Representative)