why drawings is a real account
What is the differences between real account, nominal account and personal aaccout?
Why "drawings" is a real account?
How about "capital"? Which type of accounts it belongs to?
- PKW ( PJR )Lv 710 years agoFavorite Answer
Real account which represents assets & Investments.
Nominal account which represents Expenses,Losses,Income & Gain.
Personal account represents individuals, firms, companies.
Drawings represents amount taken out by the owners of the company. From the angle of the company, it is an asset of the company as this amount could be recovered from the 'debtor'.
So, this is a real account.
Capital represents the amount due to the owners by the company. A 'liability' but we usually called it capital. So, this is a real account.