Accounting: Types of Accounting

Accounting:-

Accounting is an art of recording, classifying and summrarizing in a significant maner and in terms of money transction and event.  Accounting means collecting and recording information for making decision.

Types of Accounting:-

There are three type of accounts:

1. Personal Account :-

2. Real Account:-

3. Nominal Account :-

1) Personal Account:-

• These accounts are related to person or individuals, firms, companies, partnership, Co-operative society, club etc.

• There are two types

– Natural personal

– Artificial personal

A few examples of personal accounts include debtors, creditors, banks, outstanding/ prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, sahyog store, prakash company ltd. etc.

2) Real Account:-

• It is also known as property account. The accounts relating to goods and other property are

known as a real account.

• It means real account can be divided into two parts:

– Tangible real account (for example sales, purchase)

– Intangible real account (for example Goodwill)

Accounts relating to goods:-

• Goods accounts are sales account, purchase account, purchase return account, sales return account, goods burn by fire account, goods stolen account, goods withdraw for personal use etc.

Accounts relating to assets:-

• Accounts of assets include machine account, furniture account, building account, loan account, cash account, investment account etc.

3) Nominal Account :-

• The accounts relating to incomes and expense.

• The income accounts include rent receive account, commission receive account, interest receive account, dividend receive account etc.

• The expense accounts include salary account, rent account, advertisement account, postage and telegram account, bank interest account, printing account, stationary account, commission account etc.

Three Golden Rules of Accounting:-

Real Accounts

• Debit What Comes in         (aave to udhar)

• Credit What Goes out         (jay to jama)

Personal Accounts

• Debit The Receiver             (lenar khate udhar)

• Credit The Giver                 (aapnar khate jama)

Nominal Accounts

• Debit the Expenses and Losses       (kharch, khot udhar)

• Credit the Incomes and Gains         (aavak, nafo jama)

Example of Thee Golden Rules of Account:-

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