Classification of Accounts - JSS1 Business studies Lesson Note

Real Accounts: These accounts represent tangible assets, such as cash, inventory, equipment, and property. Real accounts have balances that carry over from one accounting period to the next.

Nominal Accounts: Nominal accounts represent revenues, expenses, gains, and losses. These accounts are temporary and are closed at the end of each accounting period to start fresh in the next period.

Personal Accounts: Personal accounts represent individuals, companies, or organizations with whom a business has financial transactions. This includes accounts receivable (money owed to the business) and accounts payable (money owed by the business).

Impersonal Accounts: Impersonal accounts are those that do not fall into the above categories. They include accounts like accumulated depreciation, which tracks the decrease in value of an asset over time, and contra accounts like allowance for doubtful accounts, which offset the balance in another account.