1. Three Types of Accounts in Accounting:  Personal Accounts These are the accounts which relate to persons, such as Customers Account, Suppliers Account etc. Personal accounts include both live personal accounts (Human beings) and artificial persons (Bank, Company etc)

2.  Real Accounts These can be tangible (i.e. can be touched and seen) or intangible (i.e. cannot be touched and seen). As a result they are further divided into:  Tangible Real Accounts. These accounts relate to things that can be touched, felt, measured etc. such as Cash Account.  Intangible Real Accounts. These accounts relate to things that cannot be touched but can be measured in terms of money, such as a Patents Account

3.  Nominal Accounts These accounts deal with expenses and losses, incomes and gains. They explain the nature of the transactions i.e. whether the particular transaction will result in an expense/loss or in an income/gain.

4. Golden Rules of Accounting Rules of Debit (Dr.) and Credit (Cr.)  Personal Account Debit the receiver Credit the giver  Real Account (Assets Account) Debit what comes in Credit what goes out  Nominal Account Debit all expenses and losses Credit all incomes and gains

5. Classify the following under personal, Real, Nominal Accounts : 1.Capital 8. Interest Accrued 2.Bank Account9.Bad Debts Recov. 3.Purchase A/c10.Carriage Inwards 4.Drawing Made11.Prepaid Rent 5.Cash Received12. Outst. Salary 6.Interest Paid13.Bank Overdraft 7.Discount Received14. Sales A/c

6. IMPORTANT NOTE If there is some Prefix or Suffix is added to a nominal account, it becomes a Personal account. For Example: Nominal A/c Personal A/c 1.Interest A/c 2. Rent A/c Outstanding intt.,Prepaid Intt. Prepaid Rent, Rent Outstanding

7. State the nature of the account (Personal, Real, Nominal) and show which will be credited and which will be debited 1.Rent Paid 2.Rent Received 3.Interest Received 4.Machinery Purchase 5.Building Sold 6.Goods Purchased 7.Discount Allowed 8.Capital Introduced