Based on JNU Accounting Solution and others
Answer
Accounts are classified into two classes:
- Personal Accounts
- Impersonal Accounts
Impersonal Accounts are further sub divided into
- Real Accounts
- Nominal Accounts
- Valuation Accounts
Thus all accounts can be classified into Personal, Real and Nominal Accounts.
Personal Accounts:
These accounts show the transactions with customers, suppliers, Money lenders, the banks and the owner.
For example: Mohan‟s A/c, Rajesh‟s A/c, M/s XY and Co. Reliance Industries Ltd., Apna Bazar Co-operative Society Ltd., Mumbai University, Dena Bank etc.
Real Accounts:
Real accounts may be the following types.
- Tangible real Accounts: These are accounts of such things which are tangible i.e. which can be seen touched or felt physically. Example: Land, Building, Furniture, Cash etc.
- Intangible real Accounts: These accounts represent such things which cannot be touched, seen or felt physically.
Example: Goodwill, Trade marks, Patent right etc.
Nominal Accounts:
Nominal Accounts includes accounts of all expenses, losses, incomes and gains. Nominal Accounts represent only services or uses.
Valuation Accounts:
Valuation accounts are accounts open to adjust values of assets e.g. provision for Depreciation, Stock Reserve, Provision for doubtful debt A/c.
