All accounts in liability side of balance sheet are personal

Hi All accounts in liability side of balance sheet are personal accounts and not nominal accounts and real accounts, is it correct? Please give examples which shows nominal and real accounts in liability side of balance sheet Thanking you

Replies (3)

All accounts are personal. The capital and reserves (either during the life or liquidation) belong to the owners/investors, loans belong to lenders, the outstanding expenses and provisions belong to the creditors and so on... Nominal accounts do not get into Balance Sheet

I agree with Srivathsan. If you look at the rule for personal accounts (debit the receiver, credit the giver), it fits into definition of a liability. Personal accounts can also be assets (for e.g., sundry debtors). However, nominal accounts (debit all expenses and losses, credit all incomes and gains) essentially get written off to each year's Profit & Loss Account and do not find a place in balane sheet.

 

Real accounts (debit what comes in, credit what goes out) are in the nature of asset and appears only on assets side of the balance sheet.

Very well clarified by Srivathsan and  Milind

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