RE: Explain about real account, personal accounts and nominal accounts
Real Account : All Assets and Liabilities fall under Real account. e.g. Cash, Bank, Building, Loan, Creditors etc....... Here Debit what comes in and Credit what goes out.
Personal Account : All accounts relating to Individuals, Firms, Companies etc... falls under Personal Account. Here Debit the Receiver and Credit the Giver.
Nominal Account : All accounts relating to Incomes and Expenses. Here Debit all Expenses and Credit all Incomes.
RE: Explain about real account, personal accounts and nominal accounts
The double entry book keeping system that is followed world over has classified the accounts into two categories: Personal Accounts and Non-personal Accounts.
Personal accounts are those accounts which belong to either single person or group of persons. Examples are Capital account, all debtors and creditors, employees, account holders, deposit holders etc.
In above cases person does not always mean an individual, it can also mean some other company.
The non personal accounts are bifurcated into : Real accounts and Nominal accounts.
Real accounts means those accounts which belong to assets whether real assets or non real assets. Examples are building, cash, fixed deposits maintained by you with someone else, plant and machinery etc
Nominal accounts are most popular category as they are expense and income accounts. Profit and loss a/c, Rent a/c, all items of revenue expense a/cs, all items of revenue earning a/cs etc are nominal accounts.
In a nut shell, a/cs are bifurcated into 3 Personal, real and nominal a/cs. Personal belong to any individual, group of people or other company or government etc. Real means the real assets or non real assets real means tangible in this context. So the asset may be tangible or not but it can still be maintained as real a/c Nominal means that all expense and income items.
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