The organized listing of all the transactions associated with a specific head is called an account. An account displays the condensed records of transactions pertaining to an object or person in question.
There are mainly 3 types of accounts :
- Personal Account
- Real Account
- Nominal Account
PERSONAL ACCOUNT
Personal accounts, as the name states, are those that are associated with certain persons, organizations, businesses, associations, etc. These persons could be representative, artificial person, or natural person.
For Example : Raj A/c, ABC Ltd A/c, Rent Payable A/c.
REAL ACCOUNT
Real accounts are those that have anything to do with goods, assets, or real estate. These characteristics may be non-physical in nature or physically present. Real accounts can therefore be classified as either tangible or intangible.
Tangible Real Account – Real accounts that are tangible have a physical presence. Put another way, these resources are tangible. For instance, A/C in a building, vehicle, machinery, etc.
Intangible Real Account – These are the goods or assets that are quantifiable in monetary terms but do not exist physically. This indicates that these assets have a certain amount of worth. For instance, copyrights, patents, goodwill, and trademarks.
NOMINAL ACCOUNT
Nominal Accounts deal with earnings, costs, profits, and losses. These consist of Revenue A/C, Purchase A/C, Rent A/C, etc..
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