Tag: accounting procedures - rules of debit and credit

Copyright is an intangible asset owned by the business. Assets are classified as real accounts.

Discount received is a gain for the business. All accounts related to expenses, losses, incomes, and gains are nominal accounts.

Trade marks are intangible assets. Like other assets, they are classified under real accounts.

Technical know-how is an intangible asset. Assets fall under the category of real accounts.

Purchase returns represent a reduction in expenses. As it relates to an expense category, it is a nominal account.

Adjusted purchases relate to the cost of goods sold. Since it is an expense-related account, it is a nominal account.

Bad debts represent a loss to the business. All losses are recorded in nominal accounts.

Personal accounts are related to transactions with the debtors and creditors, hence provision for discount on debtors is a personal A/c.

Goods misappropriated represent a loss to the business. Losses are classified as nominal accounts.

Reserve for discount on debtors is a contra-asset account related to debtors. Because it is tied to debtors (persons), it is classified as a personal account.