Question

what is an account explain differrnt types of accounts​

Answer 1

Answer:

An account is expressed in a statement form. It has two sides. The left-hand side of an account is called a Debit side whereas right-hand side is called as Credit side. The debit is denoted as ‘Dr’ and credit is denoted as ‘Cr’.

Classification of Accounts in Accounting

• Personal Account
• Real Account

1. Tangible Real Account
2. Intangible Real Account

• Nominal Account

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.

There can be personal representative accounts as well.

For example – In the case of Salary, when it is payable to employees, it is known how much amount is payable to each of the employee. But collectively it is called as ‘Salary payable A/c’.

Rule for this Account

• Debit the receiver.
• Credit the Giver.

For Example – Goods sold to Suresh. In this transaction, Suresh is a personal account as being a natural person. His account will be debited in the entry as the receiver.

Real Accounts

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

1. Tangible Real Accounts These include assets that have a physical existence and can be touched. For example – Building A/c, cash A/c, stationery A/c, inventory A/c, etc.
2. Intangible Real Accounts These assets do not have any physical existence and cannot be touched. However, these can be measured in terms of money and have value. For Example – Goodwill, Patent, Copyright, Trademark, etc.

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.

For Example – Salary paid to employees of the entity. Salary A/c will be debited when the expenses are incurred. Whereas, when an entity receives any interest, discount, etc these are credited whenever these are received by the entity.

There are some other accounts in accounting as well:

• Cash Account – This account is used for keeping the records of payments done by cash, withdrawals, and deposits.
• Income Account – Purpose of this account is to keep the record of the income sources of business.
• Expense Account – This account tracks the expenditure of the business.
• Liabilities – If there is any debt or loan then that amount comes under liabilities.
• Equities – If there is an investment of the account owner or common stocks, retained earnings then these will fall under equities.

Explanation:

Hope this helps you ✌️