CLASSIFUCATION OF ACCOUNTS

In double entry bookkeeping system all the transitions are divided into two typed of accounts. Personal accounts and impersonal accounts. The impersonal accounts are further sub divided into Real accounts and normal accounts. This there are three types of accounts in all. They are personal accounts, real accounts and nominal accounts. They are explained as under.
A. Persoonal accounts
Personal accounts related natural persons, artificial persons and representative personal accounts.
 Ramesh's a/c Khan's a/c; natural persons
Ram &co. A/c Andhra bank a/c : artificial persons.
Out standing salaries a/c and rent receivable a/c:representative persons
B. Real accounts
Real accounts related to both tangible and intangible assets.
Tangible assets- buildings a/c, machinerya/c.
Intangible assets- Goodwill a/c, copy rights.
C. Nominal Accounts
Nominal accounts related to expenses, losses incomes and gains.
Expenses: salary a/c wages a/c purchase a/c.
Losses: depreciation, bad debts stock lost by fire
Income:sales a/c, commission received a/c etc
Gains: bad debts recovered, increase in the value of assets etc.