Prepaid insurance, outstanding salaries are example of _____________.

Tangible real accounts

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Intangible real accounts

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Representative personal accounts

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Artificial or legal persons account

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Solution

The correct option is C Representative personal accounts
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 three types: Natural, Artificial and Representative accounts.
An account indirectly representing a person or persons is known as representative personal account. When accounts are of 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 insurance, outstanding salaries, etc.

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Similar questions

Q. Match the following:

1. Artificial persons accounts	a) Firms account, educational institution's accounts, bank account etc.
2. Representative personal accounts	b) Prepaid insurance, outstanding wages etc.,
3. Tangible real accounts	c) Building, furniture, cash and machinery etc.
4. Intangible real accounts	d) trademark, goodwill, patents, etc.

State whether the following statements are True or False.

1) Prepaid insurance is nominal account.
2) Personal transactions of proprietor are recorded in the books of account of business.
3) Every debit has equal and corresponding credit.
4) Loan account is personal account.
5) Drawing account is a real account.
6) Commission received is a nominal account.
7) Outstanding wages is a nominal account.
8) Bank of India is an example of real account.
9) An order placed for the goods, entry is passed/recorded in the book of account.
10 Every transaction has only on effect

Q. Classify the following accounts under personal, real or nominal accounts:

(i) Commission Paid	(ii) Commission Received
(iii) Commission Accrued	(iv) Prepaid Salaries
(v) Leasehold Property A/c	(vi) Discount Allowed
(vii) Carriage Inwards A/c	(viii) Life Insurance Corporation of India
(ix) Drawings A/c	(x) Rent Received in Advance
(xi) Debtors	(xii) Sales A/c
(xii) Rent Paid in Advance	(xiv) Bank Overdraft

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

Q. Outstanding salary account is a _______ account.

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