Saturday 23 January 2021



(30) Accounts

An account is a record of all business transactions relating to a particular person or item. In accounting we keep a separate record of each individual, asset, liability expense or income.


According to Carter: "An account is a ledger record in summarised form, of all the transactions that have taken place with the particular person or things specified."




Personal Accounts

Natural Personal Accounts

Artificial Personal Accounts

Representative Personal Accounts


Impersonal Accounts


Real Accounts   

Tangible Real Accounts

Intangible Real Accounts


Nominal Accounts


(A) Personal Accounts


The accounts which relate to an Individual, firm, company or institution are called personal Accounts. Account of Mohan, Account of X Ltd, Bank Account, Drawling Accounts etc.


(i) Natural personal Accounts: Accounts of Natural persons means the accounts of human beings. For example: Mohan's Account, Schan's Account, Debtors's Account, Creditors Account etc.

(ii) Artificial Personal Accounts: Those accounts do not have physical existence as human beings but they work as personal accounts. For example any firm's account, any company's account, any institutions account etc.

(iii) Representative Personal Accounts: When an account represents a particulars person or group of person, it is termed representative personal account. Salary outstanding, Prepaid Rent Account, Accrued Interest and Unearned Commission etc.


(B)Real Account:

The Accounts of all those things whose value can be measured in terms of money and which are the properties of the business are termed as Real accounts : For example : Cash Account, Furniture Account, Machinery Account, Goodwill account etc.


(i) Tangible Real Accounts: Tangible real accounts are the accounts of those things which can be touched, felt, measured, purchased, sold etc. Like: Cash Account, Stock account, Furniture account, Land account etc.

(ii) Intangible Real Accounts: Those accounts represent such things which cannot be touched but of course their value can be measured in terms of money. Examples are: Goodwill Accounts, Patents Account, Trade mark account etc.


(C) Nominal Accounts:

Those Accounts includes the accounts of all Expenses and Incomes.

The Examples of Nominal accounts relating to Expenses are Salaries Paid, Rent Paid, Discount allowed etc.


The examples of nominal accounts relating to income are commission received, interest received, discount received etc.