To simplify the bookkeeping process the accounting system is divided into different types of accounts. In traditional bookkeeping accounts are first grouped into either personal or impersonal accounts, and then impersonal accounts are further divided into real accounts and nominal accounts.

Checking accounts are the most accessible type of bank account, allowing you to deposit and withdraw money as often as you want. Therefore, a checking account is a great place to keep the cash you. 1:4hat are the types of trust accounts? A trust account is used exclusively for money received or held by a real estate agent for or on. Behalf of another person in relation to a real estate transaction and is not to be used to hold moneys for any other purpose. Pros of a money market account. You’ll earn higher interest on your money. Money market accounts tend to have higher interest rates than checking or savings accounts. The national average rate for money market accounts with deposits smaller than $100,000 was 0.06% in mid-March 2021, according to the Federal Reserve.

Types of Accounts – Personal Accounts

Personal accounts always represent an individual or an organization. Personal accounts are always permanent accounts as they are not closed at the end of each accounting period. At the start of the new accounting period, the closing balance from the prior accounting period is brought forward and becomes the new opening balance on the account.

Accounts receivable and accounts payable relate to individual customers and suppliers to the business respectively and are therefore examples of personal accounts.

It should be noted that the bank account also represents a balance with a particular organization (XYZ Bank) and is therefore considered to be a personal account. This is in contrast to petty cash for example, which represents physical cash within the business and is classified as a real account (discussed below).

Personal Account Journal Entry Example

The journal below is an example of an entry using a personal account (accounts payable). This journal entry reflects the payment of cash to supplier A.

Types of accounts – Personal account journal entry
Account	Debit	Credit
Accounts payable (Supplier A)	500
Cash	500
Total	500	500

Types of Accounts – Impersonal Accounts

Impersonal accounts are divided into real and nominal accounts.

Real Accounts

Real accounts include balance sheet accounts such as assets, liabilities and equity and are considered permanent accounts because they are not closed at the end of each accounting period. An example of a permanent account is the long-term assets equipment account.

At the start of the new accounting period, the ending balance from the previous accounting period is brought forward and becomes the new beginning balance on the account.

Real Account Journal Entry Example

The journal below is an example of an entry using real accounts, in this case the equipment account and the cash account. This journal entry reflects the purchase of equipment using cash.

Types of accounts – Real account journal entry
Account	Debit	Credit
Equipment	1,000
Cash	1,000
Total	1,000	1,000

Nominal Account

Nominal accounts include all income and expenditure accounts such as the rent expense, insurance expense, payroll, and revenue accounts.

Nominal accounts are always temporary accounts as they only last for an accounting period. At the end of the accounting period, the balance is transferred to the retained earnings account using closing journal entries and the account is closed with a zero balance. At the start of a new accounting period, an account will be opened only if there are transactions relating to that account.

It should be noted that the dividend account is also a nominal account.

Nominal Account Journal Entry Example

The journal below is an example of an entry using a nominal account, in this case the insurance expense account. This journal entry reflects the purchase of insurance on credit terms from a supplier.

Types of accounts – Nominal account journal entry
Account	Debit	Credit
Insurance expense	300
Accounts payable	300
Total	300	300

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a degree from Loughborough University.

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Different Money Accounts

PoliticsTechnologyFiled Under: Beginner Investing by Daniel Guidotti

In the wake of the recent recession, the American people have become disillusioned with several market related investment options. Many previously ‘sound’ investments have spiraled down to touch all time lows, wiping out the life time savings of many.

For instance the houses, which were traditionally considered good assets, got heavily devalued during the crash and are yet to catch up with their pre-recession values. With fears of a second recession lurking in the wings, the dynamics of the investment scenario have significantly changed.

The economic downturn has also changed the investment and savings perspective dramatically across the US. While confidence in investments is returning, investors are also more cautious than ever before with their money.

Different Types Of Money Accounts

Safety seems to be the key concern while investing rather than yield. Given this, the investment options which are backed by the FDIC or which are safe instruments are finding increased favor. Here is an overview of some such safe and rewarding investment options.

Table of Contents
Types of Bank Investments
Certificate of Deposit
Types of IRAs
401k Plans
Types of Bond Investments
Fixed Income Investing

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Money Market Accounts

Money Market Accounts

Types Of Real Money Accounts Definition

A money market account is a type of savings or deposit account, which earns better interest on the money deposited and has higher minimum balance requirement. There is also a limitation on the number of withdrawals you can make from the account in a month.

Banks and credit unions offer money market accounts (MMAs) as they earn interest on the funds parked in them. When you deposit funds in a money market account, it is used for investments in government and corporate securities. This is why such accounts are also called money market deposit accounts.

The interest your money earns in a MMA is usually calculated daily with the total amount shown in your account once a month. You can deposit money today into a MMA and withdraw tomorrow without much hassle. As is evident, the longer your money stays in a MMA the more the interest it accumulates.

Bank Account Types

A MMA is a good savings option because of the higher interest rate that it offers compared to a typical savings account with a bank. However, the higher yield brings its own set of restrictions on the account.