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1. Classification of Accounts 1. Real Accounts 2. Personal Accounts and 3. Nominal Accounts There are three types of accounts:
2. Classification of Accounts 1. Real Accounts: relating to tangible and intangible assets e.g. Cash, Machinery etc.
3. Classification of Accounts 2. Personal Accounts: relating to natural persons, artificial persons or representative persons. a. Natural personal accounts such as Ram’s A/c, Shyam’s A/c etc. Mr.Shyam Mr. Ram
5. Classification of Accounts Or c. Representative personal accounts such as Salary outstanding A/c, Prepaid rent A/c etc. When will I get my salary? Employee
6. Classification of Accounts 3. Nominal Accounts: relating to incomes, gains, expenses and losses etc. Salary Wages