Question

Identify the nature of the following accounts according to the traditional approach
(a) Salaries outstanding A/C
(b) Bank A/C ​

Answer 1

ANSWER :

• (a) Salaries Outstanding A/C

✎ According to Traditional Approach of accounts classification, the nature of Salaries Outstanding A/C is Personal Account. Salaries Outstanding A/C is considered as Representative Personal Account.

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• (b) Bank A/C

✎ According to Traditional Approach of accounts classification, the nature of Bank A/C is Personal Account. Bank A/C is considered as Artificial Personal Account.

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KNOW MORE :

❒ The classification of Accounts under English Approach or Traditional Approach are as follows :-

• [1] Personal Accounts : Accounts heads pertaining to persons, firms, companies, organizations etc. are called Personal Accounts. Moreover, when any prefix/suffix is used before/after any nominal account head, such accounts also comes under Personal Accounts.

• [2] Real Accounts : Accounts heads recording transactions relating to tangible things which can be seen, touched and have physical shape are known as Real Accounts. Moreover, there are some intangible items which donot have any physical shape and cannot be touched and seen, but there presence can be felt; those items are also comes under Real Accounts.

• [3] Nominal Accounts : Accounts heads recording transactions relating to losses, expenses, incomes and gains are known as Nominal Accounts.

Answer 2

Answer :

According to the traditional approach, all the accounts can be classified into three categories :-

• Personal Accounts ( Natural personal, Artificial personal, Representative personal )

• Real Accounts

• Nominal Accounts

Required classification of accounts :-

• Salaries outstanding account is categorised in representative personal account.

• Bank account is categorised in artificial personal account.

Additional Knowledge :

Personal account ➝ All the accounts which belongs to persons i.e. individuals, companies, firms etc. are categorised in personal accounts.

Nominal account ➝ All the revenue, expenses, profits and losses are categorised in the category of nominal accounts.

Real account ➝ All the assets tangible or intangible except debtors are categorised in the category of real account.