Types of Accounts

All assets of a firm, which are tangible or intangible, full under the category “Real Account”.

Tangible Real Account  , Intangible Real Account

Rule :-     Debit what comes in

Credit what goes out

These are accounts are related to individual, firms, companies etc. A few example of personal accounts included debtors, creditors, banks, Outstanding & Prepaid Accounts.

Natural Personal, Artificial Personal Accounts

Rule :-      Debit the receiver

Credit the giver

Accounts which are related to expense losses incomes or gains are called Nominal Accounts “Existing in name only”

Purchase Account, Sale Account, Commission Received Account

Rule :-      Debit all expenses and losses

Credit All incomes & gains