The account is a record which covering entire transaction of debit-credit of the distinct item or a person or a company. This entire record designated as become part of a final entry or ledger. A financial account includes sales, receivable accounts, debts, loan, PP&E (property, plant, and equipment), general stock, services of sales, payroll etc.
Account Classification
- Personal Account: the Related account of Real person and companies are classified as personal accounts. The organization keeps a distinct account for each individual. Individual account purpose for the organization of verifying the balance due from or due to them.
- Real accounts: Real Account is related as Physically tangible and several intangible objects (asset or properties) not having any physical presence.
- Nominal accounts: This account is related to temporary incomes, expenses accounts, and losses are classified as nominal accounts.