Definition of Accounting

Accounting is the process of identifying, recording, classifying and reporting information on financial transactions in a systematic manner for the purpose of providing financial information for decision making.

Types of Accounts

There are basically three types of Accounts maintained for transactions.

• Personal Account
• Real Account
• Nominal Account

Personal Account

Any individual person or any firms or any company on a blank is considered a Personal account.
For example:-
Rajesh Singh
Sona Singh
Wipro Pvt Ltd
PNB Bank
Capital etc

Real Account

Account of any physical things. The cash account or goods acount are examples of Real account.
For example:-
Cash
Land
Building
Furniture

Nominal Account

Account of any invisible things that means that things are in terms of cash are examples of Nominal account.
For example:- Discount, Commission, Salary, Wages, Freight etc.

Golden Rules of Accounting

Personal Accounts

The Receiver	Debit (Dr)
The Giver	Credit (Cr)

Real Accounts

What comes in	Debit (Dr)
What goes out	Credit (Cr)

Nominal Accounts

All Expenses or Losses	Debit (Dr)
All Income or Gains	Credit (Cr)