Types of Personal Accounts
Personal accounts are ledger accounts of individuals or organizations that have direct financial transactions with your business. They are divided into three main categories: Natural, Artificial and Representative.
1. Natural Personal Account: This type of personal account refers to human beings (individuals or persons) such as customers, dealers, owners or employees of the business. For example: a capital account of an individual or business, creditors account, debtors account, drawings account, salary payable account, accounts receivable and accounts payable, etc.
2. Artificial Personal Account: Apart from individuals or persons, separate legal entities or bodies that have financial transactions are clubbed under the artificial personal account. These accounts belong to those legal entities which are distinct from their members or owners. For example: corporations, government bodies, banks, cooperatives, hospitals, partnerships, associations and trusts, etc.
3. Representative Personal Account: This personal account is a representative of the individuals or organizations, i.e., accounts belongs to groups or categories rather than specific individuals. In this personal account, transactions belong to preceding or succeeding year. For example: an employee’s due salary from last year, rent a company paid in advance for the succeeding year can be accounted under this personal account.
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