Types of Account's

 Types of Account's

Accounting is a process of recording, classifying and summarizing of the financial transactions in a significant manner. Accounts is called arts as well as science also. According to the double entry system of bookkeeping, there are three 3 types of accounts that will help you to maintain error free recording of the financial transactions.


There is 3 main types of accounts, which is Personal Account, Real Account and Nominal Account. All these 3 accounts have their own properties and it's important.

1. Personal Accounts: The first accounts is personal accounts, which are related o the individuals, firms, companies etc. Some examples are debtors, creditors , bank, suppliers, customers account's and many more. In this accounts some are Natural person and some are Artificial person.


Natural Personal Accounts is simple to understand mostly is the name of the people. E.g., Adam A/C, Mr.Patel A/c, and many more. Artificial Personal Accounts which are created by law, such as corporate bodies and institutions are called as the Artificial Personal Accounts. Personal accounts rule is Debit the Receiver and Credit the Giver.

2. Real Accounts: Real Accounts is related with assets or liabilities of the business. It's include the tangible or intangible nature of accounts. Like., Machinery A/c, Buildings A/c, Patent Rights A/c, Cash A/c,. Some of the examples are tangible or intangible. Intangible Real accounts have Patents A/c, Copyright A/c, Trademark A/c etc. On Tangible Real Accounts Buildings, Cash A/c


Intangible Real Accounts which is only feel it, and we can't touch it but, the Tangible Real Accounts which we can touch it as well as feel it. These accounts appears in the Balance Sheet and balances is carried forward to the next financial year. Real Accounts rule is Debit What comes in and credit what goes out.

3. Nominal Accounts: Transactions related to the income, expenditure and profit and loss under this category. Nominal accounts  is not exist in the real but it's actually exits. like., Purchase and sold of the goods, salary accounts, wages accounts etc.


Nominal Accounts are income statement record and report the company's revenue , gains and losses. Nominal Accounts  rule is Debit all expenses and losses, Credit all incomes and gains.

All financial transactions are recorded with the rules of the above 3 accounts. All Accounts have their own rules and their important. At the time of recording the transactions we have to follow all 3 accounts rules.







Location: Texas, USA

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