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Saturday, March 8, 2014

 Types of Accounts

There are basically three types of Accounts maintained for transactions :

  1. Real Accounts
  2. Personal Accounts
  3. Nominal Accounts

  •   Real Accounts

  Real Accounts are Accounts relating to properties and assets, which are owned by the business
  concern. Real accounts include tangible and intangible accounts. For example,
  • Land
  • Building
  • Goodwill
  • Purchases
  • Cash

  •  Personal Accounts

  Personal Accounts are Accounts which relate to persons. Personal Accounts include the following.
  • Suppliers
  • Customers
  • Lenders

  •   Nominal accounts

  Nominal Accounts are Accounts which relate to incomes and expenses and gains and losses of a
  business concern. For example,
  • Salary Account
  • Dividend Account
  • Sales
  Accounts can be broadly classified under the following four groups.
  • Assets
  • Liabilities
  • Income
  • Expenses
  The above classification is the basis for generating various financial statements viz., Balance
  Sheet, Profit & Loss A/c and other MIS reports. The Assets and liabilities are taken to Balance
  sheet and the Income and Expenses accounts are posted to Profit and Loss Account.

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Source : Tally ERP Turtorial 1 (01 Basics of Accounting).