Account Types Homework Answers
Accounts in a journal denote assets, liabilities, income, expenses and equity presented in a temporal order by mortal account book according to which debit ,credit entries are shown.It is the statement of fiscal expenses and receipts connected to a period of time.It is also used to gather the information related to debit and credit accounts.
Such as if a firm sells any product to the consumer on credit then the consumer or purchaser will be included in accounts payable and seller at account receivable. An accountant is a person who manages all the credit and debit accounts of the company.Account is a tough subject to manage as we know students face problem in coping with accountancy homework and finally students need account types homework answers help.
Most important categorization of accounts:
- Account payable– When a company owes or be indebted to pay for the goods and services bought on credit from suppliers. Example- liabilities
- Account receivable– When a company has right to pick up cash for the goods and services sold by it to consumer. Example- assets
Types of accounts
- Personal account:
It includes accounts of a particular person an organisation. Account types homework answers tip: debit the receiver and credit the giver.It admits creditors, debtors ,customer account, employers account. Example: Mrs Kamla a/c- representing Mrs Kamla a person, M/s Rishabh & Co a/c
-symbolises M/s Rishabh&Co, an organisation.
Classification of personal accounts:
- Natural personal accounts: It puts in the natural part of a group like people’s For example- john’s a/c, Smith a/c
- Artificial personal accounts: It brings upon artificial creation of any account by the firm. For example schools account, PvtLtd account, bank accounts.
- Representative personal account: It represents the salary, wages account, outstanding income account, etc.
- a) Outstanding expenses account: The expenses to be paid for the services incurred as the payment is yet not done and it is a debt that has to pay. So it goes in liability side of the account such as outstanding wages, outstanding telephone bills.
- b) Advance expense account: The expenses which are already paid but the service has not been availed. This account maintains the record of which services are paid and to which particular person like advance wages account advance telephone bill account.
- c) Advance income account: under this account salary, wages or any commercial transaction is already done but the services are yet not taken. This account maintains all the records of services to be taken.
- d) Outstanding income account: it exhibits receivable income from another person.
- Real account:
It is the type of account which includes real elements or tangible elements. In simple words, we can say this accountre present elements which are detectable, touched or seen such as cash a/c which symbolises cash, goods a/c which includes goods and services.
- Tangible accounts-The things which are capable of being perceived or handled such as buildings, assets or land.
- Intangible accounts– It includes things which cannot be touched only felt such as goodwill of the organisation.
Account types homework answers tip: Debit what comes in and credit what goes out.We can take the example of two real accounts elements like MrJoseph purchase a car of Rs 2,00,000 for cash. Amount associated ith this buying of car directly goes into debit site as it comes in and cash goes out, so it comes in credit side.
- Nominal accounts-These types of accounts which stand for all the gains, losses, disbursement and earnings. ACCOUNT TYPES Homework Answers tip: debit all the expenses and losses whereas credit the entire incomes and gains. For example salary a/c presents all the expenses on account of salaries, interest received account includes income received at interest in an account.
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Essentially, any of the account component used in a company’s accounting system by an accountant is a part of any of these three types of accounts. There are no elements which will together fall in two accounts together.
-a nominal account is the accounts which differ from personal or real account.
-a personal account is an account which differs from real and nominal account
-a real account is an account which differs from nominal and personal account
It can either be the name of a person, place, book or a thing which helps in finding out the transaction taking place in an organisation such as for cash account, salary account, loans to staff,rent account, excise duty a/c,computer a/c,Machinery a/c.
It is important to create the account in such a way that nature of dealing could be understood by its name.As we know, a lot of dealing takes place in any company, and it is tough to manage this transaction.
Thus, to easily manage this transaction account heads are produced. Account types homework answers example: accommodation expenses made by company employers are included in accounts book in accommodation a/c.
Some important accounting head:
There are few important heads needed in any firm to carry transaction.
– Assets a/c: It maintains all the entropy connected to assets and also keep the record of person or company who is obliged to pay debt. It interprets with all real and personal accounts debtors.This can be involved only in personal and real account like land a/c, Machinery a/c, Radha’s a/c, bank a/c, etc.
– Liabilities a/c: It registers all the data related to liabilities of a firm which involves personal information of firm like owned capital and loaned capital.This can only include in personal and real account.
– Income or Gain a/c: nominal accounts represent income and gains of an organisation. It memorializes firm’s all the data related to gain and earning of the firm
– Expense and losses a/c: This is also included in nominal account only, and it registers all expenses and losses of the company.