Account is divided in following three types:
1. Personal account
2. Real account
3. Nominal account
1. Personal account: Any individual person or any firms or any company or a bank is considered in a personal account.
Rule for Personal account is: Debit the receiver and credit the giver.
2. Real account: Account of any physical things. The cash account or goods account are examples of real account.
Rules for Real account is: Debit what comes in and credit what goes out.
3. Nominal account: Account of any invisible things that means that things are in terms of cash. For example: insurance account, rent account etc.
Rules for Nominal account is: Debit all expenses and losses Credit all incomes and gains.