Question

Explain Types of accounts with suitable examples?

Answer 1

Answer:

Personal Account

These accounts types are related to persons. These persons may be natural persons like Raj’s account, Rajesh’s account, Ramesh’s account, Suresh’s account, etc.

These persons can also be artificial persons like partnership firms, companies, bodies corporate, an association of persons, etc.

For example – Rajesh and Suresh trading Co., Charitable trusts, XYZ Bank Ltd, C company Ltd, etc.

Rule for this Account:

Debit the receiver.

Credit the Giver.

Real Accounts

These account types are related to assets or properties. They are further classified as Tangible real account and Intangible real accounts.

Real Account Rules:

Debit what comes into the business.

Credit what goes out of business.

For Example – Furniture purchased by an entity in cash. Debit furniture A/c and credit cash A/c.

Nominal Account

These accounts types are related to income or gains and expenses or losses.

For example: – Rent A/c, commission received A/c, salary A/c, wages A/c, conveyance A/c, etc.

Rules:

Debit all the expenses and losses of the business.

Credit the incomes and gains of business.

HOPE THIS HELPS.