24 July 2010
Some authors (eg TS Grewal)say that Purchase & sale return A/c are real A/cs, some says that both are nominal A/cs. Can someone pls clarify that whichone is correct & Why?
As you asked for the clarification on the nature of A/cs I would like to tell you that there are 3 types of Accounts as follows:-
1. Personal Accounts : These are those which are related to the owner, any person or any entity having a legal existence, i.e. Mukul's A/c, Tata Tele Services, ICICI Bank (All Banks are Personal A/cs), Reliance Industries etc.,
2. Real Accounts: These are those which have a physical existence but not a person or any legal entity's A/c, i.e. Stock, Machinery, Furniture, Cash, Sales, Purchases etc.,
3. Nominal Accounts: These are those which shows an expense/loss or income/gain from the ordinary course of business, i.e. Salary to Staff, Rent, Electricity, Telephone, etc.
Thus you can make understand yourself that the Purchases A/c and Sales Return A/c are real A/cs.
If you are satisfied with my answer please give a feedback.
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