chart of accounts

TYPES OF ACCOUNTS

An account is divided into two sides. The left side is Debit (Dr) and the right side is Credit (cr).


Accounts are Classified into three types:
a) Personal Account
b) Real Account
c) Nominal Account

1. PERSONAL ACCOUNT:-
These accounts are released to persons, organizations, Institutes etc.
Example: ABC Co. Ltd. , Rajan's Accounts.

2. REAL ACCOUNT:
These accounts are related assets and property.
a) Tangible Assets: Furniture, Land & Building.
b) Intangible Assets: Goodwill

Example: Cash Account

3. NOMINAL ACCOUNT:-
These Accounts are related to all types of expenses and losses, income and gains.
a) Expenses: Salary, Advertising and Stationary etc.
b) Losses: Damage, Theft, Fire
c) Income: Rent Received, Commission Received, Discount Received, etc.

RULES OF ACCOUNTS

The rules for debiting and crediting various accounts may be summarized as shown below.

1. Personal Accounts:  Debit the Receiver.
                                       Credit the Giver.

2. Real Accounts:  Debit what comes in.
                                Credit What goes out.

3. Nominal Accounts: Debit All expenses and Losses
                                      Credit All Income and Gains