Nature of Account
This query is : Resolved
18 July 2010
Sir, I've been going through the chapters Amalgamation and Dissolution.
There I met with an account named
"REALISATION A/C".
I saw that Assets and liabilities are transferred to such A/C to know the last Profit or Loss.
But I'm confused regarding its nature. What nature does this A/C hold...Real, nominal or personal....and Why...???
Same is the case of SUSPENSE A/C. I want to know its nature too.
There I met with an account named
"REALISATION A/C".
I saw that Assets and liabilities are transferred to such A/C to know the last Profit or Loss.
But I'm confused regarding its nature. What nature does this A/C hold...Real, nominal or personal....and Why...???
Same is the case of SUSPENSE A/C. I want to know its nature too.
19 July 2010
Realisation account - as the name indicates is the one into which all the assets and liabilities are dumped at the time of getting realised (sold/disposed off). the assets and liabilities may be disposed at profit or loss and the over all profit or loss is collected in that realisation acccount.
Message likes :
1 times
19 July 2010
It is a nominal A/c. The reason is very simple.
For personal account there should be a person. Realisation A/c is not a person.
For real account, either it should be a asset or liability but it is neither a asset nor a liability. So it cannt be real account.
For nominal account it should be either a expense, income, loss or gain. In the realisation account we calculate profit or loss on sale of assets and payment of liabilities. So, here the output is either profit or loss. It means that it fulfills the requirement of nominal account. Hence it is a nominal account.
For personal account there should be a person. Realisation A/c is not a person.
For real account, either it should be a asset or liability but it is neither a asset nor a liability. So it cannt be real account.
For nominal account it should be either a expense, income, loss or gain. In the realisation account we calculate profit or loss on sale of assets and payment of liabilities. So, here the output is either profit or loss. It means that it fulfills the requirement of nominal account. Hence it is a nominal account.
Message likes :
1 times
19 July 2010
Suspense a/c is a real account as it is shown in the balance sheet and as it is not a person so can not be a personal account. The only option left is real account.
Message likes :
2 times
19 July 2010
Thanks a lot.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- TDS U/S. 194NF
- ITC temporary reversal and reclaim
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- Applicable TDS rate for sale of property in Nov 2024
- REGARDING 25 AS DATE OF PAYMENT AND DATE OF BOOKING
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
