State the types of Personal Accounts.
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Personal Accounts can be classified into three categories:
- Natural Personal Accounts: The term 'Natural Persons' means persons who are creations of God. Therefore, these will include accounts in individual name. For example, Ram's Account, Asha's Account, etc.
- Artificial Personal Accounts: These accounts include accounts of corporate bodies or institutions which are recognised as persons in business dealings. For exampe, the account of a limited company, the account of a club or a cooperative society, etc.
- Representative Personal Accounts: These are accounts which represent a certain person or a group of persons. For example, if rent is due to the landlord, in Outstanding Rent Account will be opened in the books. The Outstanding Rent Account represents the amount of rent payable to the landlord. Other examples of the Representative Personal Accounts are Prepaid Rent Account, Accrued Commission Account, Unearned Interest Account, etc.
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