Question

Match List-I with List-II and select the correct answer using the codes given the lists:

List-I(Types of accounts)	List-II(Principles)
I. Real Accounts	(a) Debit the receiver credit the giver
II. Nominal Accounts	(b) Debit what comes in credit what goes out
III. Personal Accounts	(c) Debit all expenses,losses credit all incomes,gains

• A. I-(c), II-(b), III-(a)
• B. I-(a), II-(c), III-(b)
• C. I-(b), II-(c), III-(a)
• D. I-(a), II-(b), III-(c)

Answer 1

Answer: (C)

I-(b), II-(c), III-(a)

There are mainly three types of accounts: Real, Personal and Nominal accounts. Personal accounts are classified into three subcategories: Artificial, Natural and Representative.

Real Accounts: All assets of a firm, which are tangible or intangible, fall under the category "Real Accounts". tangible real accounts are related to things that can be touched and felt physically. whereas, intangible real accounts are related to things that can't be touched and felt physically. The golden rule of real accounts is: Debit what comes in; Credit what goes out.

Personal accounts: These accounts are related to individuals, firms, companies, etc. A few example of personal accounts include debtors, creditors, banks, outstanding/prepaid accounts, accounts of credit customers, accounts of goods suppliers, capital, drawings, etc. The golden rule of personal accounts is: Debit the receiver; Credit the giver.

Nominal accounts: Accounts which are related to expenses, losses, incomes or gains are called Nominal accounts. The dictionary meaning of the word "nominal" is "existing in name only" and the meaning remains absolutely true in accounting sense too, because nominal accounts so not really exist in physical form, but behind every nominal account money is involved. E.g. Purchase A/C, Salary A/c, Sales A/C, etc. The golden rule for nominal accounts is:Debit all expenses and losses; Credit all incomes and gains.