87 comments

    1. Let me clear your doubt Jagan, both the account types and scenarios are totally different.

      In a personal account, there is a relation between a person to any other person or party. So in the case of being in a business if any person is giving you goods or services then you should debit the name of the giver (because it’s a personal account) and credit the giver (your account).

      Whereas in nominal account the scenario is based on business things like business expenses, loss, income, and gains. So being a businessman you will debit all expenses and losses if occurs and credit all incomes and gains.

    1. Yes Anumod right…
      When cash sales the entry would be as,

      Cash a/c … Debit
      Sales a/c … Credit

      and Journal entry for a Cash Sales would be like this.

      Acc. | Dr. | Cr.
      —————-
      Cash | 300 | —
      Sales| — | 300
      —————-
      Total| 300 | 300

  1. Hello, I had a student of science after 3 year I took a admission in fybcom so commerce is totally new for me I have 1 doubt on how to identify personal account real account and nominal account in Question please?

    1. Personal Account: The accounts and elements which represent persons and organizations.
      – Mrs. Aarti’s A/c – representing Mrs. Aarti an individual.
      – M/s Arun & Co A/c – representing M/s Arun & Co. an organization.
      – Capital A/c – representing the owner of the business, a person or organization.
      – Bank A/c – representing Bank, an organization.

      Real Account: The accounts and elements which represent tangible aspects.
      – Cash a/c – representing cash which is tangible.
      – Goods/Stock a/c – representing Stock which is tangible.
      – Furniture a/c – representing Furniture which is tangible.

      Nominal Account: The accounts and elements which represent expenses, losses, incomes, gains.
      – Salaries a/c – representing expenditure on account of salaries, which is an expense.
      – Interest received a/c – representing income on account of interest, which is an income.
      – Loss on sale of Asset a/c – representing the loss incurred on sale of assets, which is a loss.

      I hope this will clear your doubt about identifying three different accounts type in golden rules for accounting.

  2. Not required to mention the nature or product name, only cash received against cash sales naration is enough.

    1. Hi Vivek, Capital A/c and liabilities are noted in Journal entries and it follows the Golden Rules of Account. Capital account comes under Personal Account and Liabilities are like loan and debt so such kind of entries are recorded under Balance sheet.

  3. Hi, My question is if we consider personal account is for person or an organisation. Now if a person or an organization incurs an expense of commission. Now how the rule should we apply. Is it to be Dr the receiver Cr the giver or Dr all expense and loss and Cr all income.

    1. Hi Mary, first of all let me clear your first point i.e., Personal Account could be only or a person not for organization. (Personal account relates to persons with whom a business keeps dealings) So use this rule, Debit the Receiver, Credit the Giver. It’s simple just try to identify the kinda account.

  4. Hi, I have a big doubt in the types of Personal Accounts can you pls. clear it. Pls pls because my exams are closer…

    1. Hi Shazia, as far as I know there is no kinda types in Personal account as there are three kinda accounts as Personal Account, Real Account and Nominal Account. But in modern accounting world three accounts you might see under Personal Account i.e.,

      Natural Account: It is related to individuals or natural persons made of flesh and bones.
      Artificial Account: It is related to artificial person recognized by Law – such as Manipal Learning Ltd, SBI, RBI, BEL. BHEL etc.
      Representative Account: Account of groups or representative such as Debtors, Creditors, outstanding expenses and prepaid insurance.

      I hope this will help you a lot. Good Luck.

  5. Hello Sir,

    Thanks for your valuable guidance. It is very beneficial or us and also thanks for clearing all doubts in one place.

    Regards,
    Naman Jain

    1. Yes Sowmya, You are right. One way I can explain you this case with the help of demand and supply rule.

      Rule 1: When Demand Increases and Supply Decreases the Price of Value Increases and Vice Versa.
      Rule 1: When Demand Decreases and Supply Increases the Price of Value Decreases and Vice Versa.

      For an asset there is always supply thus, there is more space of production, but land is limited and very scarce. Therefore due to more demand and less supply of land the land always has an appreciation value. I hope you got my point very well.

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