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Accounts

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bhavani sankar accounts are not categorised on the basis of tangibility,
assets and liabilities real,
expenses losses and incomes gains are nominal

Then Patent is a Nominal Account?? #bhavanishanker

welcome kushwanth...
patent is an intangible asset, it is a real account not a nominal, if it is nominal why we capitalise intangible assets and amortise as per AS 26

You are Perfect Bro

how the spare purchase is nominal a/c if is related to assets I,e machinery..etc
depends on purchase, if it is a consumable spare then consume as expenditure and becomes nominal and a capital or insurance spare then capitalise it and becomes real account, refer accounting standard interpretation 10 for AS-2 and AS-10

Purchase is a nominal account while goods is a a part of real account... 

Don't worry! here is the answer 

under american Approach or modern approach

purchase of goods --->means goods coming inside ,increase in stock(asset) belongs to real account

 under British Approach or Double Entry System

purchase of goods --->treated as expense(nominal) because purchases should transfer to trading p&l account, now you need to decide whether it should be in trading p&l or not                                 

good one bhavani shankar, Thanks for sharing, so we follow the second one.

Dear Kushwanth,

Purchase Account is Nominal Account. Purchases are treated as expenses. As per Golden Rules of Accounting for Nominal Accounts (i.e., Debit all expenses and losses, Credit all incomes and gains), we debit purchase account because it is an expense. One should not be confused between Purchases and Stock. Stock Account is real account. Trading Account reflects adjusted purchases.

Stock is unspent purchases or Unsold Output.


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