Nowadays, there has been a peculiar thing focused on the accounts realm. That is the reason why the accounts department has to keep a proper record of the transactions. It is due to the Double entry system followed in the accounts department. The transaction reports have two aspects enlisted below.
Personal accounts are the type of accounts that specify the accounts of individual, firm, or an institution. Personal account mainly works under “Debit the receiver and Credit the giver” policy. In that case, the owner of the account receives something from the business and debits in the account. Credit in the sense, it gives something to the business.
The main objective of personal accounts is to calculate the amount that a personal account owes to business and the amount payable to him too.
Unlike personal accounts, real accounts are the sort of accounts where the value can be measured in terms of money and what are the properties used in the business as per the words, “Debit what comes in Credit what goes out”. Cash account, furniture account are the examples that come under real accounts.
As per the real accounts norms, when the property comes in business, it is debited and when it goes out, it is credit. The account represents a variety of business properties in terms of money. It also indicates the financial position of the business.
Nominal accounts are the type of accounts as per the words, “Debit the expenses and losses and Credit the income and gains” that include all expenses and income of the company or an individual. Salary or rent payment is the example of nominal accounts. Nominal accounts are the virtual account where the name alone exists rather than the account. Nominal accounts are used to provide information regarding the enlisted ones.
Amount spent in a particular period over various heads
Income received in particular period over various heads
These are the different types of accounts that bay your mind over different accounting needs.
Managing accounts is a vast thing that brings in new ideas toward the accounting phenomenon.
For inquiry call us: 7397723052 / 1800-200-1766.