Types of Accounts

There are basically three types of Accounts maintained for transactions:

• Real Accounts
• Personal Accounts
• Nominal Accounts
  
  
  
   

 Real Accounts

 

Real Accounts are Accounts concerning 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. 

For example

• 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.