Classification of Accounting Elements

Accounting Elements are classified into the following:

• Real Accounts
• Nominal Accounts

Real Accounts 

They are the accounting elements of  Statement of Financial Position and are reported therein, to wit:

• Assets 

• Liabilities

• Equity

They are permanent accounts and are not closed at the end of accounting period. Thus, they are called open accounts.

Nominal Accounts

They are the accounting elements which comprise the Income Statement and they are the following:

• Revenues 

• Expenses

They are called temporary accounts because they are put to a zero balance or are closed at the end of accounting period.

Researched by: