Drawings Account is ___________.

Real

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Personal

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Nominal

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All of the above

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Solution

The correct option is B Personal
Accounts recording transactions with a person or group of persons are known as personal accounts. These accounts are necessary, in particular, to record credit transactions. Personal accounts are of the following types:

1. Natural persons: An account recording transactions with an individual is termed as a natural persons' personal account. For e.g. Kamal's account, Mala's account. Both males and females are included in it.

2. Artificial or legal persons: An account regarding financial transactions with an artificial person created by law or otherwise is termed as an artificial persons' personal account. For e.g. Firms' account, limited companies' accounts.

3. Representative personal account: An account indirectly representing a person or persons is known as representative personal account. When accounts are of a similar nature and their number is large, it is better to group them under one head and open a representative personal account. For e.g. prepaid rent, outstanding wages etc.

Drawings are related to the account of an individual, i.e. proprietor's account which shows the amount withdrawn by the proprietor from the business for his/her personal use. Hence, it is classified as a personal account.

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Objective type Questions
Classify the following accounts under the types of personal, Real and Nominal account.

1) Life insurance premium A/c
2) Mr. Kulkarnis’s Capital A/c
3) Goods A/c
4) Freight A/c
5) Wages A/c
6) Goodwill A/c
7) Copyright A/c
8) Outstanding income A/c
9) Bank charges A/c
10) Outstanding expenses A/c
11) Sundry income A/c
12) Income receivable A/c
13) Export duty A/c
14) Furniture A/c
15) Import duty A/c
16) Free sample distribution A/c
17) Sundry expenses A/c
18) Discount A/c
19) Drawings A/c
20) Fixed deposit A/c
21) Profit on sale of furniture A/c
22) Office equipment A/c
23) Bank of India A/c
24) Machinery A/c
25) Carriage Outward A/c
26) Loss on sale of machinery A/c
27) Loan A/c
28) Deposits with MSEB
29) Loss by fine A/c
30) Legal expenses A/c

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