CLASSIFICATION OF ACCOUNTS

FINANCIAL ACCOUNTING SSS1 SECOND TERM              

WEEK 7

CLASSIFICATION OF ACCOUNTS

Performance Objectives

Students should be able to:

1. What is an account
2. Explain, giving two examples each, the following types of account

1. Nominal account
2. Real account
3. Personal account

Contents

An account is a ledger record, in a summarized form, of all transactions that have taken place with a particular person.

An account can also be defined as a history of all transactions of similar nature. It is usual to keep separate accounts for each class of asset, liability, income and expense relating to a business.

Classification of Accounts

All accounts fall into one or two classes: personal accounts or impersonal accounts. Each of these classes can be further divided into subgroups…