Question

Classify into Real, Nominal, Personal accounts.

Do if you know.​

Answer 1

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Let's know what Real, Nominal and Personal accounts are, starting with the easiest.

Personal accounts:- As we can understand from the name itself, these type of accounts are related to persons/people. Now, these persons can be natural persons or artificial persons. Natural persons such as Ria's A/c, Ramesh's A/c. Artificial persons such as companies, partnership firms.

Real accounts:- These accounts are related to assets, possessions or properties which can be physically existing or non physical in nature. So, they are classified into tangible real accounts and intangible real accounts.

→ Tangible real accounts are the ones which can be touched, seen or felt. For example Cash A/c, Vehicle A/c.

→ Intangible real accounts are the ones which can be measured in terms of money. So, it has some value. These possessions or assets cannot be touched or felt as they are non physical in nature. Examples → Goodwill, trademark.

Nominal accounts:- These accounts are related to income or profits and expenses or losses. Example → Rent A/c, Wages A/c.

Now, let's classify the given terms into Real A/c (R), Personal A/c (P) and Nominal A/c (N).

(i) Land and building → (R)

(ii) Excise duty → (N)

(iii) Creditors → (P)

(iv) Capital → (P)

(v) Motor vehicles → (R)

(vi) Goodwill → (R)

(vii) Investments → (R)

(viii) Salary → (N)

(ix) Debtors → (P)

(x) Bad Dₑbₜₛ → (N)

(xi) Depreciation → (N)

(xii) Wages → (N)

(xiii) Repairs → (N)

(xiv) Ramesh, a debtor → (P)

(xv) Interest Received → (N)

(xvi) Bank Overdraft → (P)

(xvii) Purchase Returns → (N)

(xviii) Drawings → (P)

(xix) Freight → (N)

(xx) Return Inwards → (N)