Question

explane types.of accounts in detail​

Answer 1

Explanation:

3 Different types of accounts in accounting are Real, Personal and Nominal Account. Real account is then classified in two subcategories – Intangible real account, Tangible real account. Also, three different sub-types of Personal account are Natural, Representative and Artificial.

Answer 2

ANSWER :

✎ Accounts are classified on the basis of two approaches namely, English Approach or Traditional Approach and American Approach or Modern Approach.

• ❒ Under English Approach or Traditional Approach, accounts are classified into Three types.

The three types of accounts under English Approach or Traditional Approach of classification are as follows :-

• [1] Personal Accounts :

★ Accounts heads pertaining to persons, firms, companies, organizations etc. are called Personal Accounts.

• ❍ Example :

Ram's A/C, Gauhati Commerce College A/C etc.

• ❍ Rules for Debit and Credit :

★ Debit is the Receiver of the benefit.

★ Credit is the Giver of the benefit.

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• [2] Real Accounts :

★ Accounts heads recording transactions relating to tangible things are known as Real Accounts.

• ❍ Example :

Machinery A/C, Cash A/C, Building A/C, Bank A/C etc.

• ❍ Rules for Debit and Credit :

★ Debit what Comes in.

★ Credit what Goes out.

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• [3] Nominal Accounts :

★ Accounts heads recoding transactions relating to losses, expenses, incomes and gains are known as Nominal Accounts.

• ❍ Example :

Wages A/C, Rent A/C, Salaries A/C, Miscellaneous Expense A/C etc.

• ❍ Rules for Debit and Credit :

★ Debit all Expenses and Losses.

★ Credit all Incomes and Gains.

_________________________________________________________

• ❒ Under American Approach or Modern Approach, accounts are classified into Five types.

The five types of accounts under American Approach or Modern Approach are as follows :-

• [1] Assets Account :

★ Assets account are the accounts of assets and properties of the business entity.

• ❍ Example :

Land, building, plant, machinery, patents, cash in hand, cash at bank, debtors etc.

• ❍ Rules for Debit and Credit :

★ When there is an increase in the Asset, it is 'Debited'.

★ When there is a decrease in the Asset, it is 'Credited'.

____________________________________________

• [2] Liabilities Account :

★ Liabilities accounts are the accounts pertaining to the liabilities of the business entity.

• ❍ Example :

Lenders, creditors, outstanding expenses, bank overdraft etc.

• ❍ Rules for Debit and Credit :

★ When there is an increase in the Liabilities, it is 'Credited'.

★ When there is a decrease in the Liabilities, it is 'Debited'.

____________________________________________

• [3] Capital Account :

★ Capital is the amounth with which the business is started. It is the account of the owner who invests money in the business as capital.

• ❍ Rules for Debit and Credit :

★ When there is an increase in the Capital, it is 'Credited'.

★ When there is a decrease in the Capital, it is 'Debited'.

____________________________________________

• [4] Revenue Accounts :

★ Revenue accounts are the accounts that record the income and gains.

• ❍ Example :

Sales, discount received, interest received, commission received etc.

• ❍ Rules for Debit and Credit :

★ When there is an increase in the Revenue, it is 'Credited'.

★ When there is a decrease in the Revenue, it is 'Debited'.

___________________________________________

• [5] Expense Accounts :

★ Expenses accounts are the accounts that include expenses incurred and losses sufferef by the entity.

• ❍ Example :

Purchases, wages paid, rent paid, depreciation charged etc.

• ❍ Rules for Debit and Credit :

★ When there is an increase in the Expense, it is 'Debited'.

★ When there is a decrease in the Expense, it is 'Credited'