--%>
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 : International foreign and domestic trade

    Explain some of the reasons why international foreign trade is difficult and risky from the perspective of exporter than is domestic trade.

    		•
  • Q : Techniques of valuation of goodwill

    Techniques of valuation of goodwill: A) Average profit technique B) Super profit technique C) Capitalization technique

    		•
  • Q : Motivations for counterparty to enter

    Specify the basic motivations for the counterparty to enter into the currency swap.

    		•
  • Q : Categories under budgets are divide

    Write down the chief categories under which budgets are divided?

    		•
  • Q : Small talk Define small talk and

    Define small talk and discuss its role in developing the relationship.

    		•
  • Q : Official reserve assets Describe the

    Describe the official reserve assets and some of its important components.

    		•
  • Q : Human race in our modern world Here are

    Here are two papers addressed to the in-class essay from the previous class. Study them in the context of the exact wording of the assignment and take some notes that will enable you to refer to specific features of the two papers when talking about their relative qua

    		•
  • Q : Define Income Statement How to do

    How to do income statement = from the revenues we will deduct all the expenses related to that period to get the income or loss. When the revenues are more than the expenses then it is income and when the expenses are more than the revenues then it is

    		•
  • Q : European term bid-ask quotes Restate

    Restate following one-, three-, and six-month outright forward European term bid-ask quotes in forward points. Spot               1.3431-1.3436

    Q : Calculation of weighted average cost of

    Calculation of weighted average cost of capital: Under this following steps are undertaken: 1. Record amount in respect of various long term resources of firm. 2. Add up the amo

    		•