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ACCOUNTS -TYPES,

PRINCIPLES,CONCEPTS,
CONVENTIONS
TYPES
3 types
1.Personal
2.Real
3.Nominal



Personal Accounts: include the accounts of
persons with whom business deals. Divided
into 3..



Natural Artificial Representative
Natural Personal: persons whom are
creations of God. Eg: Mohans Account.

Artificial Personal: Accounts of corporate
bodies or institutions. Eg: Account of Limited
company, clubs, society.

Representative: represent a certain person or
group of persons. Eg: outstanding salary
account.
For Personal Accounts THE RULE IS
Debit the receiver
Credit the giver
Cash paid to Vimal, account of Vimal debited.
Cash received from Nithin, account of Nithin
credited.
REAL ACCOUNTS



Tangible Intangible
Tangible Real Accounts: Which can be
touched. Eg: cash account, building account,
stock account,. But Bank account is a
personal account.


Intangible Real Accounts: which cannot be
touched, but measured in terms of money. Eg:
Patents account, goodwill account..
For Real Accounts THE RULE IS
Debit what comes in,
Credit what goes out
Eg: building purchased for cash, building
account debited, cash account credited
NOMINAL ACCOUNTS
It is opened in books to simply explain the
nature of transactions. They do not really exist.
Even though we pay , salary, rent or commission
as such dont exist.

Expenses&Loses Incomes&Gains
Eg: Rent. Lighting, insurance, dividends, loss by
fire.
For Nominal Accounts THE RULE IS
Debit all expenses &
losses,
Credit all gains &
incomes
ACCOUNTING PRINCIPLES
It is nothing , but the rules adopted by the
accountants universally while recording
accounting transactions.
These principles divided into
Accounting Concepts (8)
1.Separate Entity Concept.
Business is considered to be separate entity
from the proprietor(s).


2.Going concern concept.
The business is assumed to continue for a fairly
long time.

3. Money measurement concept.
Accounting measures only monetary
transactions.

4.Cost concept:
Closely related to going concern concept. An
asset is ordinarily entered on the accounting
records at the price paid to acquire it.
5. Dual aspect concept:
Every transaction has a dual effect. A starts
business with capital 10000. Here asset 10000,
other hand the business has to pay prop. 10000.

For every debit, there is an equivalent credit
6. Accounting period concept:
The business is done to make profit. So at a
particular point of time, recurringly, the
businessman has to STOP & SEE BACK, how
things are going. Such a time period is called
accounting period. Usually A YEAR.A YEAR

7. Periodic matching of costs & revenue concept:
It is based on accounting period concept. To
ascertain profit in that period , revenue & cost
(expenses) of that period.


8. Realization concept:
Here revenue is recognised when a sale is made.
Eg:..

CONVENTIONS
Four conventions in accounting

1.Full disclosure.
Reports should disclose fully & fairly the
informations.

2. Consistency:
Accounting practice should remain unchanged from
one period to another.

3. Materiality: The accountant should attach
importance to material details & ignore
insignificant details, otherwise it will be
overburdened.

4.Conservatism:
Thank you all, for
the patient
listening..