Classification of accounts.pdf

Accounting
There are many types of accounts and with different work purpose.
These are classified here.
Accounts will be noted down in Ledger.

1. CLASSIFICATION
OF ACCOUNTS
Presented by - Simhadri Bhavana
Guided by - Dr. Girija Nandini

2. A record of the relevant
transactions relating to a
particular head.
It records not only the amount of
transactions, but also their
effects and directions.
For example, a cash account will
show all of cash received and
paid.
2
WHAT IS AN
ACCOUNT?

3. TYPES OF
ACCOUNTS
Personal Accounts
Nominal Accounts
An account for use by an
individual for that person's own
needs.
A general ledger account that does
not close at the end of the
accounting year.
A general ledger accounts that are
closed at the end of each
accounting year.
Real Accounts

4. Debit
Credit
Personal
Golden
Rules:
Real Nominal
The Receiver
The Giver
What
comes in?
What
goes out?
All expenses
& losses
All income
& gains

5. They are of three types:
2
PERSONAL ACCOUNTS
01
02
03
Natural Personal Account
Artificial Personal Account
Representative Personal Account

6. Natural Persons are human beings.
Therefore, we include the accounts belonging to them under
this head.
For instance, Debtors, Creditors, Capital A/c, Drawings A/c,
Ram a/c, etc.
NATURAL PERSONAL
ACCOUNTS
ARTIFICIAL PERSONAL
ACCOUNTS
They are not human beings.
An account recording financial transactions with an
artificial person created by law.
Ex- Bank a/c, xyz com. a/c

7. An account indirectly representing a person or
persons.
These represent the natural or artificial accounts.
Ex- Salary outstanding a/c, Pre paid insurance a/c,
Drawing a/c
5
REPRESENTATIVE
PERSONAL ACCOUNTS

8. 01. Tangible real
account
Account relates to an asset
which can be touched, felt, seen
and measured.
Ex- Machinery a/c, Furniture a/c,
etc.,
REAL
ACCOUNTS
02. Intangible real
account
Accounts relates to assets which
cannot be touched physically but
can be measured in value.
Ex- Goodwill a/c, Patent a/c,
Trade marks a/c etc.,

9. NOMINAL ACCOUNT
They are the general ledger accounts
that are closed at the end of each
accounting year.
They are also referred to as
temporary accounts.
These accounts deals with expenses,
incomes, profits and losses.
Ex- Rent, Salary, Telephone bill

10. THANK YOU!