Explain what is Impersonal and Personal accounts?
| IMPERSONAL ACCOUNT:In the accounts of the nominal ledger, we have different types of expenses for different purposes like rent, insurance, telephone and others. As these expenses are related NOT to the person to whom the money is paid and more concerned towards the reason for payment these are known as IMPERSONAL accounts.
PERSONAL ACCOUNT: In contrast to impersonal accounts, personal accounts are kept for each of the credit customers or suppliers of a business. Here we have the purchases or sales record in a PERSONAL account which is between the business and another specified business. Incidentally, the personal accounts are kept in personal ledgers and of two types namely the sales ledger and purchase or bought ledger. |
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