This is Ravi Verma, In this article, I will tell you about types of accounts.
There are three types of accounts in accounting rules.
- Real Account
- Personal Account
- Nominal Account
What is a Real Account?
According to this rule, whenever any goods or property comes into the company, we debit it into our company account.
And if any goods or services come out of our company, we will credit them to our company account.
Rule:- Debit what comes in and credit what goes out.
What is Personal Account?
This account is mainly used by the person himself, which can be someone’s name or any person himself.
Rule:- Debit the receiver and credit the giver.
If we have received goods or any property we will Credit them to our company account, then if we provide any goods or services to any other person, in this case, we will Debit them to our company account Will give.
What is Nominal Account?
In accordance with this rule, whenever an expense is incurred in our Company, we shall debit the entry of that expense in our books of account,
And if there is any kind of income or profit in our business then in that case we will credit them into our books of account.
Rule:- All Expenses and losses are Debit, and All incomes and gains are credit.
All these processes are called the Golden Rule.