Question

Classify the following Account. .
1. Wages a/c 2. Cash a/c
3. Goodwill a/c 4. Stock a/c​

Answer 1

Answer:

1. Nominal/Expenses Account

2. Real/Asset Account

3. Real/Asset Account

4. Real/Asset Account

- as per traditional/modern approach.

Explanation:

Traditional Approach:

All accounts are classified into

1. Real Account - Assets (except banks, debtors) and liabilities (expect creditors)
2. Nominal Account - Incomes/losses/expenses/gains
3. Personal Account - Debtors/Creditors/banks (anything with a name basically)

Modern Approach:

All accounts are classified into

1. Incomes/Gains
2. Expenses/Losses
3. Assets
4. Liabilities
5. Capital