--%>
Assignment Help - homework help

Difference among personal or real account or nominal account

What is the difference among personal or real account and nominal account?

E

Expert

Verified

The total business transactions are classified into three. They are as illustrated:

• Transactions associated to persons
• Transactions associated to Things
• Transactions associated to incomes and expenditures 

In accountancy we have three kinds of accounts they are: personal, real and nominal.

The personal account refers to all the transactions associated to the natural persons, artificial persons and representative person’s example: Rama, Ravi, XYZ bank, outstanding rent.

A) First category of transactions fits in to the personal accounts

Rule: A real account comprises things in the business that is possessions.

Debit the receiver and then credit the provider.

B) Second category of transactions associated to: Real accounts example: machinery, buildings, cash and so on.

Rule: Debit that comes in and credit and what goes out

C) The Nominal accounts comprise all the transactions associated to the expenditures, incomes, losses and gains. Example: rent received, rent paid, bad debts, and gain on sale of an asset.

Rule: Debit of all expenses and losses and credit all incomes and gains.

   Related Questions in Financial Accounting

  • Q : Balance per bank What does Balance per

    What does Balance per bank signify?

    		•
  • Q : Case study of an economic and labour

    The woman in the dark suit (serious women always wear black suits) leafed through the papers on her desk. She was a fund manager and she was nearing the deadline for an investment decision by one of her leading clients, who wanted to invest in sovereign bonds in a dev

    		•
  • Q : Hedging transaction exposure and money

    Compare and discuss the hedging transaction exposure by using the forward contract vs. money market instruments. When the optional hedging approaches do creates the same result?

    		•
  • Q : Psychological Health Psychological

    Psychological Health: The employees have noted in their survey feedbacks that their peer relations are based on trust and are healthy. But the nature of work is such that they see lot of suffering. Their interaction with clients at times is not health

    		•
  • Q : Performing the capital budgeting

    Explain difference between performing the capital budgeting analysis from the parent firm’s perspective as opposed to the project perspective.

    		•
  • Q : European Monetary System Discuss the

    Discuss the workings and arrangements of European Monetary System (EMS).

    		•
  • Q : Define the term Equipment Define the

    Define the term Equipment in Accountancy? Why they are used?

    		•
  • Q : Matlab Applications in Image and Video

    Image and video processing is most difficult topic in electrical and electronics field. This topic becomes trickier if you are taking use of Matlab in this. Student faces a lot of problem in image and video processing theories. If you are messed up with same difficulties

    		•
  • Q : Prepare the journal entry to record the

    The Webster Company uses the aging method to estimate the allowance for doubtful accounts. The following schedule of accounts receivable was prepared as at December 31, 20x6: Age Balance % uncollectible 0-30 days $674,000 0.5% 31-60 days 186,000 1.2% <

    		•
  • Q : Accountancy Accountancy is the process

    Accountancy is the process of communicating financial information about a business entity to users such as shareholder and manager. The communication is generally in the form of financial statements that show in money terms the economic resources under the control of management; the art lies in s

    		•