Types of Accounts

 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).