{"id":32118,"date":"2016-08-20T23:22:05","date_gmt":"2016-08-20T23:22:05","guid":{"rendered":"https:\/\/ezaccounting.com.sg\/accounting-classification-of-accounts\/"},"modified":"2022-02-24T09:39:27","modified_gmt":"2022-02-24T09:39:27","slug":"accounting-classification-of-accounts","status":"publish","type":"post","link":"https:\/\/www.ezaccounting.com.sg\/blog\/accounting-classification-accounts\/","title":{"rendered":"Accounting- Classification of Accounts"},"content":{"rendered":"<h1>Accounting &#8211; Classification of Accounts<\/h1>\n<h2>Accounting Classification<\/h2>\n<p>It is necessary to know the classification of accounts and their treatment in double-entry system of accounts. Broadly, the <a title=\"EZ Accounting Software\" href=\"https:\/\/ezaccounting.com.sg\/software\/ez-accounting-software\">accounts<\/a> are classified into three categories:<\/p>\n<ul class=\"list\">\n<li>Personal accounts<\/li>\n<li>Real accounts\n<ul class=\"list\">\n<li>Tangible accounts<\/li>\n<li>Intangible accounts<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p>Let us go through them each of them one by one.<\/p>\n<h2>Personal Accounts<\/h2>\n<p>Personal accounts may be further classified into three categories:<\/p>\n<h3>Natural Personal Account<\/h3>\n<p>An account related to any individual like David, George, Ram, or Shyam is called as a <i>Natural Personal Account<\/i>.<\/p>\n<h3>Artificial Personal Account<\/h3>\n<p>An account related to any artificial person like M\/s ABC Ltd, M\/s General Trading, M\/s Reliance Industries, etc., is called as an <i>Artificial Personal Account<\/i>.<\/p>\n<h3>Representative Personal Account<\/h3>\n<p>Representative personal account represents a group of account. If there are a number of accounts of similar nature, it is better to group them like salary payable account, rent payable account, insurance prepaid account, interest receivable account, capital account and drawing account, etc.<\/p>\n<h2>Real Accounts<\/h2>\n<p>Every Business has some assets and every asset has an account. Thus, asset account is called a real account. There are two type of assets:<\/p>\n<ul class=\"list\">\n<li><b>Tangible<\/b> assets are touchable assets such as plant, machinery, furniture, stock, cash, etc.<\/li>\n<li><b>Intangible<\/b> assets are non-touchable assets such as goodwill, patent, copyrights, etc.<\/li>\n<\/ul>\n<p>Accounting treatment for both type of assets is same.<\/p>\n<h2>Nominal Accounts<\/h2>\n<p>Since this account does not represent any tangible asset, it is called nominal or fictitious account. All kinds of expense account, loss account, gain account or income accounts come under the category of nominal account. For example, rent account, salary account, electricity expenses account, interest income account, etc.<\/p>\n<p>SOURCE: <a title=\"Accounting Software\" href=\"http:\/\/www.tutorialspoint.com\/accounting_basics\/accounting_classification_of_accounts.htm\">TUTORIAL POINTS<\/a><\/p>\n<p>Feel free to login to www.ezaccounting.com.sg<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Accounting &#8211; Classification of Accounts Accounting Classification It is necessary to know the classification of accounts and their treatment in double-entry system of accounts. Broadly, the accounts are classified into three categories: Personal accounts Real accounts Tangible accounts Intangible accounts Let us go through them each of them one by one. Personal Accounts Personal accounts<\/p>\n","protected":false},"author":3,"featured_media":32380,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[211],"tags":[253,351,222,352],"class_list":["post-32118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-ez-accounting-software","tag-free-accounting-software","tag-system","tag-tutorialpoints"],"aioseo_notices":[],"aioseo_head":"\n\t\t<!-- All in One SEO 5.0.1.1 - aioseo.com -->\n\t<meta name=\"description\" content=\"It is necessary to know the classification of accounts and their treatment in a double-entry system of accounts. 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