ACCOUNTING

There are mainly three types of accounts

1. Real accounts
2. Personal accounts
3. Nominal accounts

REAL ACCOUNTS

Accounts related to assets come under the category of  real accounts e.g land, furniture,machinery,goodwill,patent are real accounts. Some of the assess of the business are such which you can touch, feel and see e.g. Land, machinery, furniture are such assets.Tangible assets have physical existence. Some of the examples of the tangible assets are cash,inventories,debtors,securities,land,building,machinery,furniture etc.

In business its not necessary that all assets must have a physical existence. Some assets are which cannot be touched, seen or felt but they have a economic value. The example of such assets are goodwill,patents, trademark,brand value, human intelligence.These assets are called intangible assets.

PERSONAL ACCOUNTS

Accounts related to persons are called personal accounts. In business we have to deal with a number of persons. Some are living like us and some are artificial which do not have a living existence but have a separate legal existence. Thus in Accountany we classify persons in to natural persons and  artificial persons.

Natural persons are the persons who are living e.g Rahul, Mohit

Artificial persons are all the firms , companies, institutions with whom you deal.

NOMINAL ACCOUNTS

These are the accounts related incomes and expenditures of a business entity. Expenditure and expenses are the amount paid or payable which has given its benifit to the business in the fiscal year. eg salaries, rent, transportation,electricity, taxes..etc

Incomes are the receipts which increase the profits of the business. Examples of commission received, interest received,divedent received etc..