Accounts is all about understanding the Golden rules. From a journal entry the process of accounting starts and for this, it is basic necessary to understand the golden which is a handy formula for you. The rule is as follows:


           Debit – The receiver

           Credit – The giver
2. Real

          Debit – What comes in

          Credit – What goes out
3. Nominal

          Debit – All expenses and losses

          Credit – All incomes and gains

I. Personal Accounts is the accounts which relate to persons. Personal accounts include the following.
a) Natural Persons : Accounts which relate to individuals. For example, Vijay’s A/c, Dawood’s A/c etc.
b) Artificial persons : Accounts which relate to a group of persons or firms or institutions. For example, Reliance Ltd., IDBI Bank, Jamal Mohamed College, etc.

c) Representative Persons: Accounts which represent a particular person or group of persons. For example, outstanding salary account, prepaid insurance account, etc. The business concern may keep business relations with all the above personal accounts, because of buying goods from them or selling goods to them or borrowing from them or lending to them. Thus they become either Debtors or Creditors. The proprietor being an individual his capital account and his drawings account are also personal accounts.

II. Real Accounts is relating to properties and assets which are owned by the business concern. Real accounts include tangible and intangible accounts. For example, Advertisement, Land, Building, Goodwill, Purchases, Sales, etc.

III . Nominal Accounts do not have any existence, form or shape. They relate to incomes and expenses and gains and losses of a business concern. For example, Salary Account, Dividend Account, Rent, etc.

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