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An account can be defined as a record in a double entry system that is kept for each ledger i.e. class of Asset, Liability, Revenue and Expenses. The principles of double entry is applied to an account.

Classification of Accounts

Accounts can be classified into:

(a) Personal account

(b) Impersonal account


(i) Personal Account: These are accounts for the names of individuals, form and business enterprises e.g. Segun account, Lagunju Nig. Ltd Accounts, Debtors and Creditors account.

(ii) Impersonal Accounts: These are accounts for properties items of expenditure and income. It can be divided into two namely:

(a) Real Accounts: These are accounts for something we can see touch or move. They are accounts for assets e.g. Land and building account, machinery account, etc.

(b) Nominal Accounts: These are accounts for expenses incurred, Income received, losses, and gains e.g. rent account, discount received account, discount allowed account insurance, and interest accounts.


From the following transaction of Nike, find out the nature of accounts and also state which accounts should be debited and which should be credited.

(i) Rent paid in cash

(ii) Interest received in cash

(iii) Goods sold on credit to Ojo

(iv) Purchased Furniture for cash

(v) Machinery sold in cash

(vi) Cash paid to Salewa.

Analysis of Transactions

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