Types of Accounts: Real, Personal and Nominal Accounts with Examples

There are rules which simply the accounting process. Firstly, understand the real account examples, meaning of real account, mix examples of personal account and real account along with mix example of nominal account and real account. Secondly, we will understand nominal account examples, meaning of nominal account, combination example of personal account and nominal account along with combination example of real account and nominal account. Thirdly, we will understand personal account examples, meaning of personal account, combination example of real account and personal account along with combination example of nominal account and personal account.

There are credit and debit rules of accounting which is referred as 3 golden rules of accounting. It is also referred as 3 types of accounts in accounting. Here we will see types of accounts with examples of real account, examples of nominal account as well as examples of personal account. Let us understand further in detail:

Types of Accounts with Examples

There are 3 types of accounts which are called as Real Account, Nominal Account and Personal Account. We will understand in detail along with examples of personal real and nominal account.

Real Account Definition

Any kind of assets which is either tangible (for example: land, stock, building, etc.) or intangible (for example: goodwill, copyrights, patents, etc.) are called Real Account.

First Golden Rule – Real Accounts

Debit what’s come in and Credit what goes out.

Accounts that reflect the physical characteristics of a situation are as follows:

• The Goods / Stock Account represents physically existent of stock.
• Machinery Account – a representation of tangible machinery.
• Cash Account – a bank account that represents cash that is physically present.

Examples of Real Accounts

Lets take few from the top 50 examples of real account to understand the concept in much better way.

Real Account Example

Mr. Joe purchased furniture of Rs.75,000/- for cash.

Accounts	Debit Type	Credit Type	Applied Rules
Furniture A/c	Real A/c		Debit what’s come in.
To Cash A/c		Real A/c	Credit what goes out.

Real accounts are one of the three types of accounts. This is the good example of real account to real account accounting procedures. As per the first golden rule of Real Accounts – Furniture A/c is debited with Rs.75,000/- and Cash A/c is credited with Rs.75,000/-.

Examples of Real Account

Purchased goods from retail store for Rs.22,000/- for credit.

Accounts	Debit Type	Credit Type	Applied Rules
Purchaser A/c	Real A/c		Debit what’s come in.
To Retail Store A/c		Personal A/c	Credit the giver.

This is the great example of real account to personal account accounting process. As per the golden rule Purchaser A/c is debited with Rs.22,000/- and Retail Store A/c is credited with Rs.22,000/-.

Real Account Examples

Goods were sold for Rs.5,000/- in cash.

Accounts	Debit Type	Credit Type	Applied Rules
Cash A/c	Real A/c		Debit what’s come in.
To Sales A/c		Real A/c	Credit what goes out.

Here Rs.5,000/- will be debited from Cash A/c and credited to Sales A/c. This is the real time example of transaction between real account to real account.

Best Example of Real Account

I made a deposit of Rs.7,500/- cash in my bank account.

Accounts	Debit Type	Credit Type	Applied Rules
Bank A/c	Personal A/c		Debit the receiver.
To Cash A/c		Real A/c	Credit what goes out.

Here transaction was made between personal account and real account for Rs.7,500/- where Bank A/c was debited and Cash A/c was credited. Hope these examples of real accounts were useful for you to understand the concept.

Nominal Account Definition

Those accounts which are associated with income, gains, losses or expenses are known as Nominal Account. At the end remaining balances of nominal accounts are then posted to capital account.

Second Golden Rule – Nominal Accounts

Debit all expenses & losses and Credit all income’s & gain’s

Accounts that reflect the no monetary value are as follows:

• Interest received account – This is a representation of income obtained as a result of interest.
• Salaries account – a general ledger account that represents expenses on account of salaries.
• The account for Profit on sale of assets – represents the sale of assets, which is a gain.
• The account for loss on sale of assets – represents the sale of assets, which is a loss.

Examples of Nominal Accounts

Here are few from the top 20 examples of nominal account to understand in depth.

Nominal Account Example

Salary (wages) of Rs.28,000/- was paid to Mr. Shah in cash.

Accounts	Debit Type	Credit Type	Applied Rules
Salary A/c	Nominal A/c		Debit all expenses & losses.
To Cash A/c		Real A/c	Credit what goes out.

Nominal accounts are one of the three types of accounts. This is the best example of nominal account to real account. As per the golden rule – Salary A/c is debited with Rs.28,000/- and Cash A/c is credited with Rs.28,000/-.

Example of Nominal Account

Outstanding wages of Rs.52,000/- to be paid to Mr. Joseph.

Accounts	Debit Type	Credit Type	Applied Rules
Salary A/c	Nominal A/c		Debit all expenses & losses.
To Salary Outstanding A/c		Personal A/c	Credit the giver

This is one of the good example of nominal account to personal account accounting method. As per the golden rule – Salary A/c is debited with Rs.52,000/- and Salary Outstanding A/c is credited with Rs.52,000/-.

Personal Account Definition

Those accounts which are either directly or indirectly related to individuals, companies, firms or organisations are known as Personal Account. Example of personal accounts includes: Kumar Account, Xyz Pvt. Ltd. account, capital account, prepaid account, bank account, drawings account, creditors account, outstanding account, debtors account, suppliers account, etc.

Third Golden Rule – Personal Accounts

Debit the receiver and Credit the giver

Accounts that reflect the account used for personal reasons are as follows:

• Bank a/c – a bank account that represents an organization.
• Mrs. Jenny a/c – the account is representing Mrs. Jenny in person.
• Capital a/c – a type of account that represents the owner of a firm, organization or an individual.
• M/s Fintech & Co a/c – Is a company that represents a corporation M/s Fintech & Co.

Examples of Personal Accounts

Let us understand the concept in depth with few from the top 10 examples of personal account.

Personal Account Example

I took out cash of Rs.45,000/- from my bank account for personal use.

Accounts	Debit Type	Credit Type	Applied Rules
Drawing A/c	Personal A/c		Debit the receiver
To Cash A/c		Real A/c	Credit what goes out.

Personal accounts are one of the three types of accounts. As per the golden rule – Drawing A/c is debited with Rs.45,000/- and Cash A/c is credited with Rs.45,000/-.

Example of Personal Account

Mr. Jain was paid Rs.35,000/- in cash.

Accounts	Debit Type	Credit Type	Applied Rules
Mr. Jain A/c	Personal A/c		Debit the receiver
To Cash A/c		Real A/c	Credit what goes out.

This is the great example of personal account to real account accounting procedure. As per the golden rule – Mr. Jain A/c is debited with Rs.35,000/- and Cash A/c is credited with Rs.35,000/-.

Personal Account Examples

Mr. Pankaj started his firm with a cash investment of Rs.85,750.

Accounts	Debit Type	Credit Type	Applied Rules
Cash A/c	Real A/c		Debit what’s come in.
To Capital A/c		Personal A/c	Credit the giver.

Here Rs.85,750/- will be debited from Cash A/c and credited to Capital A/c. This is the real time example of transaction between real account to personal account.

Best Example of Personal Account

Brokerage fees were earned, but were not received sum of Rs. 9,500/-.

Accounts	Debit Type	Credit Type	Applied Rules
Accrued Brokerage A/c	Personal A/c		Debit the receiver.
Brokerage A/c		Nominal A/c	Credit all income’s & gain’s.

Here transaction was made between personal account and nominal account for Rs.9,500/- where Accrued Brokerage A/c was debited and Brokerage A/c was credited. Hope these examples of personal accounts were useful for you to understand the concept.

Conclusion

Here we have understood the meaning of three types of accounts along with 10 examples of personal account, real account and nominal account. Hope these real account nominal account personal account examples will assist you in your class 11, class 12 and after in your accounting career.

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