Question

Mr. Kulkarni's Capital Account is a ____________ account.

• A. Nominal
• B. Real
• C. Personal
• D. None of the above

Answer 1

The correct option is C Personal

Personal accounts can be identified very easily as they are simply the accounts of those parties that a business normally deals with. They are opened in the names of those parties. They are usually suppliers and customers of the business or creditors and debtors. The balances at the financial year end are carried forward to the next accounting period. The debtors appear in the asset side of the balance sheet, whereas creditors in the liabilities and equity portion.

Mr Kulkarni's Capital Account is the account of a natural person, i.e. an account of a person who is alive. Hence, it can be classified as a personal account.