Definition of Accounting
Accounting is a systematic recording day to day business transaction is called as accounting.
Accounting is the process of identifying, recording, classifying and reporting information on financial transactions in a systematic manner for the purpose of providing financial information for decision making.
Types of Accounts
There are basically three types of Accounts maintained for transactions
- Personal Account
- Real Account
- Nominal Account
1. Personal Account: Any individual person or any firms or any company or a bank is considered in a Personal account.
For example:-
- Rajesh Singh
- Muna Enterprise
- Wipro Pvt Ltd
- PNB Bank
- Capital etc.
2. Real Account: Account of any physical things. The cash account or goods account are examples of Real account.
For example:-
- Cash
- Land
- Building
- Furniture
- Computer etc.
3. Nominal Account: Account of any invisible things that means that things are in terms of cash are examples of Nominal account.
For example:-
- Discount
- Commission
- Salary
- wages
- Freight etc.
Rules of Accounting
