Question

postage & telegram a/c is which type of account?

Answer 1

Solution :-

Postage and Telegram (or may be it is Postage and Telegraph) is a type of "Nominal Account".

In Double Entry System of accounting, all the transactions are divided into 3 accounts. These are a follows.

1) Personal Account

2) Real Account

3) Nominal Account

Personal account always represents an individual or an organisation.personal accounts are considered permanent because they are not closed at the end of each accounting period. At the start of the new accounting period, the closing balance from the previous accounting period is brought forward and becomes the new opening balance on the account. An example of a personal account is the bank account.

Real accounts are balance sheet accounts, which include assets and liabilities and equities. The real accounts are permanent accounts because they are not closed at the end of each accounting period. An example of real account is fixed assets account.

Nominal accounts include all income and expenditure accounts such as rent expenses, insurance expenses, postage and telegraph expenses, advertisement expenses, interest received, commission received etc. Nominal accounts are temporary because last for only one accounting period. At the end of the accounting period, the balance is transferred to the retained earnings account using closing journal entries and the account is closed with a zero balance.