Classification of Accounts
- Accounting can be classified into the following categories:
Real a/c
Nominal a/c
- Personal accounts can be of the following types:
Artificial personal a/c
Representative personal a/c
- Real a/c can be of the following types:
Intangible a/c
- Nominal a/c can be of the following types:
Income or gains a/c
- Natural personal a/c represents accounts of persons who are creation of God like.
Gopal’s a/c, etc.
- Artificial personal accounts represents accounts of corporate bodies or other institutions which are regarded as persons under the statute like
LIC a/c, etc.
- Representative personal accounts represent accounts of certain persons or group of persons like.
Pre-paid Insurance a/c
Salary outstanding a/ac
Accrued interest a/c, etc.
- Representative personal accounts are shown in the balance sheet.
- Triangle real accounts represent accounts, which relates to such things, which can be touched, felt or measured etc. Examples of Tangible Real a/c may be:-
Plant & Machinery a/c
Stock a/c
Furniture a/c, etc.
- Intangible real a/c represents such accounts which can not be touched like-
Trade marks a/c
Patents a/c, etc.
- Nominal accounts are those accounts which are opened in the books of account just to explain the nature of transaction like
Rent a/c
Wages a/c
Postage a/c
Traveling a/c, etc.
- The following are examples of fictitious assets:-
Deferred revenue expenses
Debit balance of profit and loss a/c , etc.