As I know, there are three classification of accounts, real accounts, personal accounts and nominal accounts. My question is whether General Reserve, Capital Reserve, Revaluation Reserve etc. are real, personal or nominal.
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Classify General Reserve
Replies (11)
Hey Garima.....................
Reserves are real accounts.......as its not personal & not related to any type of expences & losses its just a transfer of profit................
Real Acc agreed!!!!!!!!
.
real account
can anyone explain why it is Real a/c and not Nominal A/c ????????
One cannot blindly classify any Reserve A/c..
Any reserve is either created against any Asset / Personal A/c / Expenses / Incomes.
So nature of any reserve A/c depends primarily against the classification above.
If Plant revaluation reserve is created, it means the same has been created against Asset(Plant). So Plant Revaluation reserve will be also a Real A/c as per valuation principles.
Similarly, DRR created is against a Representative Personal A/c, so DRR will be personal A/c.
Hope you understood.
I Agree with Faiz Ahmed!!!
Can Any one tell me the way of posting a query????
Its a real account ..:)
i agreed with Faiz Ahmed
gen reserve is nominal sine it is created just by debiting p&l a/c.
But it is given as nominal accounts in model test papers
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